TURKMENISTAN/IMF Staff Completes 2026 Article IV Mission to Turkmenistan

IMF Staff Completes 2026 Article IV Mission to Turkmenistan

FOR IMMEDIATE RELEASE

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.

Economic growth picked up slightly in 2025, driven by the hydrocarbon sector. Turkmenistan’s key policy challenge remains the translation of hydrocarbon wealth into more diversified, inclusive, and sustainable growth.
Achieving this transformation requires bold and comprehensive reforms centered around exchange rate unification, market-based macroeconomic policies, stronger fiscal frameworks, and enhanced governance and transparency.
Further improvements in the availability, quality, and reliability of economic statistics is needed to support policymaking and strengthen transparency.

Washington, DC – June 22, 2026: An International Monetary Fund (IMF) mission led by Ms. Anna Bordon visited Ashgabat during June 4 – 16, 2026. The purpose of the visit was to review the country’s economic landscape, including its financial developments, economic outlook, risks, and policies aimed at promoting diverse, inclusive, and sustainable growth. The mission met with senior government officials, representatives of the private and financial sectors, and the diplomatic community. At the end of the visit, Ms. Bordon issued the following statement:

“Economic activity picked up modestly in 2025. Growth is estimated by staff to have increased from 3.4 percent in 2024 to 3.6 percent in 2025, supported by a smaller contraction in the hydrocarbon sector, while non-hydrocarbon growth moderated amid structural constraints. Inflation declined from 4.6 percent in 2024 to 2.7 percent in 2025, reflecting a sharp slowdown in non-food price pressures and tighter monetary conditions, including lower central bank directed lending to priority sectors. The current account surplus narrowed significantly, from 4.7 percent of GDP in 2024 to 1.7 percent of GDP in 2025, driven by lower hydrocarbon prices and strong import growth.

“Looking ahead, growth is projected to moderate to about 2.4 percent in 2026 and remain subdued over the medium term, reflecting capacity constraints in the hydrocarbon sector and persistent structural inefficiencies associated with the large state footprint in the economy. Inflation is expected to rise in 2026, reaching about 6.9 percent by year-end, driven by higher food and import prices, before stabilizing at around 5 percent over the medium term. Credit conditions are likely to ease somewhat as directed lending resumes, posing risks of renewed price pressures. The current account surplus is projected to narrow further to about 1.1 percent of GDP in 2026 as construction-related imports rise and hydrocarbon exports benefit only partially from higher oil prices because of limited capacity. Over the medium term the external position is expected to deteriorate, as hydrocarbon prices decline. Risks to the outlook are broadly balanced, but uncertainty is high.

“The central government fiscal balance turned into a small surplus in 2025, as a reduction in expenditures more than offset a slight decline in revenues. While the fiscal balance is projected to improve in 2026, reflecting lower capital spending, it is expected to deteriorate over the medium term, reflecting the erosion of hydrocarbon revenues. Given large buffers and low debt, the Turkmenistan authorities should reorient fiscal policy towards building physical and human capital. Spending should be reprioritized towards the direct support of health and education, targeted social protection, and high-quality infrastructure, supported by stronger public investment management, gradual rationalization of generalized subsidies, and wage policies aligned with productivity.

“Strengthening public financial management remains essential, including expanding fiscal reporting coverage beyond the central government, establishing a single treasury account, and introducing medium-term budgeting frameworks to enhance policy planning and transparency. SOE reform is central to improving fiscal risk management and private sector development.

“The Central Bank of Turkmenistan (CBT) should focus on price and financial stability. Directed lending has been the main driver of monetary policy, weakening monetary transmission and distorting credit allocation. The CBT should strengthen operational independence by winding down directed lending and related prudential waivers and transferring development-related lending to the government budget. The CBT should actively manage liquidity to contain inflationary pressures and develop an interbank market. Banking sector reform should support market-based credit allocation and financial stability.

“Exchange rate unification is of the highest priority to remove distortions and support diversification. The large gap between the official and parallel exchange rates creates significant distortions, fuels rent-seeking, and constrains private sector activity. The authorities should undertake an upfront devaluation toward a market-clearing rate, supported by tight macroeconomic policies, clear communication, and targeted social assistance to protect vulnerable households. Exchange restrictions on payments and transfers for current international transactions should be eliminated.

“Diversification requires a shift from administrative controls to a market-oriented strategy. Import substitution, directed credit, regulated prices, and foreign exchange rationing have supported some domestic activity but have not generated significant export diversification. A unified exchange rate and price and interest rate liberalization would improve incentives and help improve resource allocation. Complementary reforms should upgrade trade logistics and transport corridors, expand digital infrastructure and broadband access, strengthen payment and credit infrastructure, and align education with labor market needs. Governance, transparency, and anti-corruption reforms are also essential to improve the business environment.

“The authorities are strongly recommended to enhance fiscal coverage, improve national account, price, and external sector statistics, develop labor market and social indicators, and increase the availability of economic data.

“The IMF team is grateful to the authorities and other stakeholders for their warm hospitality and insightful and candid discussions.

Turkmenistan: Selected Economic and Financial Indicators, 2024–28


	Est.	Est.	Proj.	Proj.	Proj.
	2024	2025	2026	2027	2028

Output and prices
Real GDP 1/	3.4	3.6	2.4	2.5	2.5
Real hydrocarbon GDP	-10.6	-1.6	0.4	0.4	0.5
Real nonhydrocarbon GDP	6.2	4.4	2.6	2.7	2.8
Consumer prices (end of period)	3.8	3.2	6.9	1.4	5.5
Consumer prices (period average)	4.6	2.7	5.4	3.6	3.8
Investment and savings
Gross investment	16.0	15.2	15.4	15.6	15.8
Of which: State budget	1.6	1.4	0.6	1.5	1.6
Gross savings	20.7	16.9	16.5	16.6	15.1
Fiscal sector
Overall fiscal balance 2/	-0.1	0.1	0.5	0.0	-0.5
Revenue	14.4	14.2	13.4	13.5	13.1
Expenditure	14.5	14.1	12.9	13.5	13.6
Total public debt 3/	4.1	3.1	2.9	2.8	2.7
Monetary sector
Credit to the economy 4/	2.2	4.5	6.0	7.3	8.0
Credit to GDP ratio	49.6	46.0	45.6	45.4	46.8
Manat broad money	10.1	12.9	8.2	9.9	10.9
External sector
Exports of goods (In millions of US$)	12,177	11,356	11,697	12,578	11,445
Imports of goods (In millions of US$)	7,665	9,552	9,927	10,511	11,027
Current account balance	4.7	1.7	1.1	1.0	-0.7
Foreign direct investment	0.4	0.2	0.2	0.2	0.2
Total public sector external debt	4.1	3.1	2.9	2.8	2.7
Memorandum items:
Nominal GDP (in millions of manat)	240,363	270,893	289,545	311,762	327,072
Nominal GDP (in millions of US$)	68,675	77,398	82,727	89,075	93,449

Sources: Turkmen authorities; and Fund staff estimates and projections.
1/ Staff uses its own GDP estimates given that the narrative underlying the official GDP growth estimates is hard to reconcile with other available data. In particular, official GDP growth is extremely stable, despite shocks, including the pandemic.
2/ Excluding receipts from government bond issuance and privatization proceeds.
3/ Includes domestic state government debt and external public and publicly guaranteed debt.
4/ Including credit to SOEs.