Economy of Turkmenistan looks good amid falling GDP in West

During the crisis in the global economy, Turkmenistan promptly took effective measures to protect itself against the negative impact of the pandemic.

Today, the world economy is in a very difficult situation. The current coronavirus pandemic affected all countries. And that led to the suspension of production, falling of prices for hydrocarbon resources, and a decrease in their consumption in the world market, as well as a decline in international trade. Considering this background, the economic situation in Turkmenistan looks much better. Expert in economics from, candidate of economic sciences, member of the Coordinating Council of the International Union of Economists, head of the Union of Economists of Turkmenistan Yuri Aronsky commented on the general course of the today processes in comparison with other countries.

Overview of the economic situation in Europe

For example, the drop in the gross domestic product (GDP) in the EU countries in the first half of 2020 is 11,9%, in some countries about 20% (Great Britain, France).  And the US GDP, as indicated by American sources, fell by a record 32,9%!

The situation in Russia is a little bit better, but even there, according to international experts, the value of the GDP decline indicator steadily approaches 7%.  Besides, realistically assessing the situation and the risks of the second wave of the pandemic, many international organizations and agencies (IMF, World Bank, OECD, Moodis, S&P Global Ratings) revise their forecasts downward, believing that the dynamics of the recession will be even more negative.

There are difficulties, but several industries show steady growth

Amid this background, Turkmenistan demonstrates significantly stable economic dynamics.  Yes, there is a certain decrease in GDP growth from 6,3% in 2019 to 5,7% at the end of 7 months of 2020 for the same period, there are prerequisites for an even slight decrease in the value of this indicator by the end of this year to about 5%.

At the same time, the economic situation around Turkmenistan is difficult and that has an impact on the country’s economy. Thus, the main consumer of gas from Central Asia — China — reduced the volume of purchases in the first half of 2020 by 23%, the transport industry and tourism also suffered significant losses due to the closure of borders. But at the same time, several industries show steady growth, primarily due to an increase in domestic consumption — retail turnover grew by 19,3% in 7 months, general production increased by 4,4%, plans for oil and gas production were fulfilled. The growth of liquefied gas production reached 118,4%.

Cabinet has promptly taken effective measures

The Turkmen state promptly took appropriate measures to protect the economy from the negative impact of the crisis caused by the coronavirus. As part of maintaining the economic balance, the state budget and related expenditures were revised. The government expanded the lending program for businessmen, and also provided entrepreneurs with additional incentives to defer tax and debt payments. Air transport agencies have received similar benefits.

The government focused on the importance of providing markets with the necessary volumes of essential goods. For the effective implementation of this process, the relevant enterprises received financial assistance from the state.

July document significantly reduced economic risks

In early July, the government adopted the National Program on Reducing the Impact of Difficult Situations in the World Economy on the Economy of the Country and Sustainable Growth of the National Economy for 2020-2021. The main goal of the program is to comprehensively present the measures taken by the government of Turkmenistan to combat the decline in the country’s economic indicators, to accelerate the further growth of the national economy.

The program defines a list of measures and control over their implementation, including ensuring macroeconomic stability, maintaining GDP growth rates and ensuring social protection of the population, improving the investment climate, further developing the private sector of the economy, accelerating the introduction of digital technologies in all sectors, and much more.

Moreover, the program provides the necessary investments in the health care and social protection system for the creation of enterprises for the production of medicines and disinfectants, medical supplies, and equipment with the participation of foreign capital.

The program is also focused on the issues of maintaining the high export potential of the state and non-state sectors of the economy, as well as the growth of the volume of import-substituting products. That makes it possible to maintain a positive balance of foreign trade and, thereby, receive the necessary foreign exchange resources for the development of the country’s economy.

Employment issues are solved

To improve the employment of the population, the document stipulates measures to increase the supply of labor and regulate labor relations.

Thus, within the global economic crisis, the National Program of Turkmenistan creates the necessary conditions for sustainable development of the country’s economy, the creation of new jobs, and the protection of public health.

19 сен 2020, 07:46

Gurbanguly Berdimuhamedov, Yuri Aronsky

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