Turkmenistan, an independent state in Central Asia, is bordered by Afghanistan to the southeast, Iran to the southwest, Uzbekistan to the northeast, Kazakhstan to the northwest, and the Caspian Sea to the west. Turkmenistan, which achieved independence in 1991, is divided into five provinces (welayatlar), with a separate capital district for the capital city of Ashgabat. Turkmen is the official language of Turkmenistan, although Russian is still widely spoken in cities as well. The currency is the Turkmen new manat (TMT).
Turkmenistan possesses the world's fourth-largest reserves of natural gas and substantial oil resources. The Turkmenistan government is actively seeking to diversify its gas export routes beyond the existing Russian pipeline network. Turkmenistan is largely a desert country with intensive agriculture in irrigated oases. One-half of its irrigated land is planted in cotton.
From 1998 through 2005, Turkmenistan suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, total exports rose by an average of 15% per year from 2003 through 2008, largely because of higher international oil and gas prices. New pipelines to China and Iran, which began operations in late 2009 and early 2010, gave Turkmenistan additional export routes for its natural gas. Foreign investment is encouraged.
The United Nations Conferences on Trade and Development (UNCTAD) consider Turkmenistan among the world’s top ten recipients of foreign direct investment (FDI), which were worth 12.6 billion United States dollars (USD) during the period between 2008 and 2011.
Recent declines in global energy prices, the temporary halt of natural gas exports to Russia and Iran, and the cooling Chinese economy negatively impacted the economy of Turkmenistan, resulting in slowdowns in growth of the gross domestic product (GDP). Based on official data, the GDP growth was relatively stable at 65% in 2017 as compared to the 6.2% growth attained in 2016. The economy remains challenged with external trade imbalances. Although imports decreased substantially in 2017, the current account deficit is still expected to remain significant at 9% of GDP in 2018 as energy revenues will continue to be lower. According to the International Monetary Fund (IMF) estimates, inflation rates will further increase from 8% in 2017 to 9.4% in 2018 due to the continued size of external debt and exchange rate controls on imports and international payments.
IMF forecasts growth rates will slightly decline in GDP for Turkmenistan from 6.2% in 2017 to 5.6% in 2018. As hydrocarbons represent more than 90% of exports, the current decline in energy prices and loss of natural gas clients will continue to negatively translate to export revenues. However, Turkmenistan continues to respond to external shocks proactively by promoting and encouraging the private sector for import substitution and export expansion. Turkmenistan continues to keep sufficient international reserves and continues attracting large FDI inflows.
PwC Turkmenistan supports clients with the local knowledge and skills of its people and with access to a broad range of other professionals across the PwC global network of firms. PwC enjoys an unrivalled presence in the region, with offices in Almaty and Astana (Kazakhstan), Baku (Azerbaijan), Tbilisi (Georgia), Bishkek (Kyrgyzstan), Tashkent (Uzbekistan), Ashgabat (Turkmenistan), Ulaanbaatar (Mongolia), and Yerevan (Armenia), and covers all sectors of the economy, including energy, financial services, consumer and industrial products, and telecommunications.