The International Monetary Fund (IMF) forecasts the gross domestic product (GDP) of Turkmenistan to grow by 6.3 percent in 2019 compared to 6.2 percent in 2018, Trend reports with reference to the report following the visit of the IMF mission in March-April in Ashgabat.
Inflation in Turkmenistan will be 13.4 percent in 2019 (on average over the period) compared with 13.2 percent in 2018, according to the IMF.
"Economic growth was affected last year by the moderation of public investment and bank lending and a more active use of foreign exchange regulations, which compressed private demand and imports," reads the report.
"Enhancing competitiveness and improving currency convertibility, moving to a market-based economy, and building human capital are essential for achieving sustainable, diversified, and inclusive growth, without a widening in external imbalances," the IMF said.
Greater transparency and better economic statistics would help attract private foreign and domestic investment and improve access to financing, while supporting decision making and credibility, according to the report.
The improvement in the external balance is likely to be temporary, given that the official exchange rate remains above the equilibrium value, investment is expected to rise, and the outlook for hydrocarbon prices is subdued, reads the report.
Risks are tilted to the downside, stemming from the possibility of lower-than-expected return on past investment, rising external financing costs, and geopolitical and regional uncertainties, the IMF noted.
"Key steps include privatizing state-owned enterprises, promoting competition, enhancing the rule of law, and reducing red tape," reads the report. "Phasing out import-substitution policies would make exports more competitive and help diversify the economy.
The next staff visit is tentatively scheduled for October 2019.
According to a report by British Petroleum (BP), Turkmenistan ranks fourth in the world in terms of natural gas reserves and currently exports it to China and Iran.
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