Turkmenistan Economic Outlook
According to government estimates, GDP growth reached 6.2% in 2022, up from 4.6% in 2021. Sky-high oil and gas revenues—up 80% in the year amid elevated energy prices—will have supported domestic demand through increased investment and public spending. Accelerations in services, retail trade and manufacturing activity also contributed to the expansion. Turning to 2023, available data points to an upbeat picture in Q1: Industrial and construction activity increased by 9.2%, while quarterly budget revenues and spending exceeded their objectives by 116% and 97.1%, respectively, amid still-high hydrocarbon prices. Meanwhile, the President announced at the end of April that the country was moving quickly to build a transcaspian pipeline. This will allow oil and gas exports to reach European markets, boding well for revenues and further investment.
According to regional organization SESRIC, Turkmenistan’s inflation averaged 17.5% in 2022 (2021: 14.9%) due to elevated price pressures for energy and food. This year, inflation should wane but remain in double digits. Commodity price swings, the possible end of state-administered prices and lower agricultural yields amid unfavorable weather pose upside risks.