Turkmenistan set for record growth

Turkmenistan is heading for record economic growth this year, driven by gas exports, Chinese-backed projects and a state investment boom, according to multilateral financial institutions

  • By Peter Salmon
  • 15 May 2010
Email a colleague
Request a PDF

Turkmenistan is heading for record economic growth this year, driven by gas exports, Chinese-backed projects and a state investment boom, according to multilateral financial institutions.

GDP growth this year is projected at 15.3% by the IMF, 13.0% by the EBRD and 6.5% by the ADB. The institutions estimate 2009 growth at, respectively, 4.0%, 6.0% and 4.0%.

The forecasts are all the more striking given the disruption last year of gas exports to Russia, the mainstay of Turkmenistan’s wealth since independence – which cost the country between $7 and $10 billion.

But the multilaterals’ economists say investment – mainly Chinese-backed – in oil and gas production, and public works, have made up for the dip in gas revenues. A fresh crop of roads and buildings around Ashgabat, and a new tourist resort on the Caspian coast, is material evidence.

The ADB attributes Turkmenistan’s impressive performance in 2009, when most countries were in recession, to “robust growth in construction, services, and agriculture”. Public investment was $8.8 billion, 1.6 times the 2008 level.

The EBRD’s transition report says: “Large public investments in construction and infrastructure and growth [of services] – particularly transportation, communication and retail – supported double-digit growth in the non-hydrocarbon sector.”

It also highlights failures: Turkmenistan’s regional development plan, designed to boost the rural economy, is “yet to be implemented”; and the export of electricity to Tajikistan via Uzbekistan has been disrupted by international disputes.

If Turkmenistan this year achieves the growth rate forecast, it will amount to an unprecedented recovery from the decline of gas exports to Russia. In 2009, Turkmenistan received record revenues in the first quarter from gas sales to Russia – but as the effects of the economic crisis and oil price slump took hold, problems mounted.

In April, the main gas pipeline to Russia was closed by an accident. The damage was soon repaired, but then Gazprom, Russia’s gas company, demanded a renegotiation of contracts and lower prices. No agreement was reached and exports were halted for the rest of the year.

Gas exports to Russia in 2009 were 11.8 billion cubic metres (bcm), less than one third of the usual level. And Turkmenistan’s only other exports were to Iran, which as usual bought about 7 bcm. But a saviour – and Russia’s first serious competitor for central Asian gas supplies – arrived: China, which in December last year completed its new gas export pipeline from Turkmenistan to its western provinces, via Uzbekistan and Kazakhstan.

Exports to China are expected to be 6 bcm this year and 11 bcm next year, rising to 30 bcm annually soon afterwards. China also made a $4 billion loan to Turkmengaz, the Turkmen gas company, and other investments in the new South Yolotan gas field.

Turkmenistan publishes little economic data and the IMF’s regular Article IV consultation last year highlighted “weaknesses in national accounts and in the coverage of fiscal data” that “continue to hamper surveillance”.

  • By Peter Salmon
  • 15 May 2010

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Jul 2017
1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 27,039.93 106 7.36%
2 Deutsche Bank 25,125.19 81 6.84%
3 Bank of America Merrill Lynch 23,128.33 61 6.29%
4 BNP Paribas 19,315.94 110 5.26%
5 Credit Agricole CIB 18,706.93 106 5.09%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 13,488.13 59 8.47%
2 Citi 11,496.21 73 7.22%
3 UBS 11,302.86 45 7.09%
4 Morgan Stanley 10,864.95 59 6.82%
5 Goldman Sachs 10,434.21 54 6.55%