- GDP (PPP):
- $121.8 billion
- 6.3% growth
- 6.3% 5-year compound annual growth
- $18,200 per capita
- Inflation (CPI):
- FDI Inflow:
Turkmenistan’s economic freedom score is 47.4, making its economy the 167th freest in the 2021 Index. Its overall score has increased by 0.9 point, primarily because of an improvement in property rights. Turkmenistan is ranked 37th among 40 countries in the Asia–Pacific region, and its overall score is below the regional and world averages.
Turkmenistan’s economy remains one of the most repressed in the Index. Economic freedom is not attainable in any meaningful sense in Turkmenistan as the governing regime is currently constituted. In the absence of a robust private sector, the state plays an extremely important role in economic activity and maintains monopoly control of the development of new onshore hydrocarbon fields.
IMPACT OF COVID-19: As of December 1, 2020, no deaths had been attributed to the pandemic in Turkmenistan, but economic growth was forecast to decline to 1.8 percent for the year.
Once an important stop on the Silk Road, the former Soviet republic of Turkmenistan is now a dictatorship and one of the world’s most secretive, closed, and authoritarian countries. The presidency of Gurbanguly Berdymukhamedov, who has been in power since 2007 and was reelected to a third term in 2017, has not brought about any advances in political, social, or media freedom. The economy remains dominated by state-owned monopolies and is based on intensive agriculture in irrigated oases, sizable oil resources, and the world’s fourth-largest reserves of natural gas. China is currently its largest export market, especially for gas, but deliveries of natural gas to Russia were resumed in 2019.
The government owns all land, and other real property ownership rights are limited. Enforcement of contracts and protection of property rights are ineffective. The nominally independent judiciary is subservient to the president, who appoints and removes judges at will. Laws are poorly developed, and judges are poorly trained and open to bribery. Corruption is widespread.
The individual income tax rate is a flat 10 percent, and the corporate tax rate is 20 percent. Other taxes include value-added and property taxes. The overall tax burden equals 15.6 percent of total domestic income. Government spending has amounted to 15.0 percent of total output (GDP) over the past three years, and budget deficits have averaged 1.1 percent of GDP. Public debt is equivalent to 29.5 percent of GDP.
The business climate has not improved under the current autocratic government, and state-owned industries have not been privatized. Agriculture accounts for about 8 percent of GDP but employs almost half of the workforce. The government ended free access to subsidized water, gas, and electricity in 2018. In 2020, because of lower revenues from hydrocarbons, it had difficulty supplying subsidized food to the country’s citizens.
Turkmenistan has five preferential trade agreements in force. The trade-weighted average tariff rate is 2.9 percent, but nontariff barriers, exacerbated by heavy government involvement in various sectors, dampen trade flows. Foreign investment is limited to a few handpicked partners and is further undercut by a lack of transparency and an opaque regulatory framework. The underdeveloped financial sector continues to constrain the flow of financial resources.