Turkmenistan Economy Facts
Turkmenistan’s economy is based on the production of oil, natural gas and cotton. The income from gas exports in particular is large, but the wealth is distributed unequally among the residents. Partly as a legacy of the Soviet era, the economy is largely state-controlled but privatizations are ongoing, especially in the service sector.
Turkmenistan is one of the world’s largest producers of natural gas, and the country also has significant oil production. Through the gas pipelines built during the Soviet era (c. 1920–1991), Turkmenistan was long able to export gas only to Russia, Ukraine, Georgia and Armenia. To reduce its dependence on Russia in particular, Turkmenistan has built gas pipelines to Iran, China, Turkey (via Azerbaijan and Georgia) since the end of the 1990s, and from there to the EU. A pipeline is being built to Afghanistan, Pakistan and India (see Natural Resources, Energy and Environment).
- Countryaah.com: Major imports by Turkmenistan, covering a full list of top products imported by the country and trade value for each product category.
Cotton production has had serious problems. Turkmenistan was formerly one of the world’s largest cotton producers, but the harvest fell in 1995-2005. The yield then increased again and the cotton industry is being modernized so that more cotton can be processed in the country.
Privatizations are ongoing
The state controls most of the economy. After independence from the Soviet Union in 1991, market economy reforms began, but they started later in Turkmenistan than in other former Soviet republics. It was not until 1995 that the state released some control over pricing. At the same time, a number of privatizations were carried out by small businesses in the service sector, and agricultural land was leased to private farmers. It also became easier for foreign investors to invest in the country. But sales of larger state-owned companies were slow. The important oil and gas industry is still state-owned.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including TKM which represents the country of Turkmenistan. Check findjobdescriptions to learn more about Turkmenistan.
When President Berdimuhamedow took office in 2007, he announced that market economy reforms would be accelerated. In 2008, the Constitution stated that Turkmenistan is a market economy where private ownership is respected. The government set ambitious privatization targets, but even today most of the economy is state controlled.
Large subsidies on basic commodities and other state control of the economy caused Turkmenistan to receive support from the IMF only in 2010. Another reason why the IMF is cautious is the major democratic deficiencies in the country. The World Bank only provides smaller loans and limited support to Turkmenistan for the same reasons. The European Development Bank (EBRD) has lent money on a small scale, as has the Asian Development Bank (ADB). Turkmenistan receives criticism for spending a lot of money on the boastful buildings such as beautiful airports, eight-lane highways and major sports arenas.
The large mineral resources meant that Turkmenistan had a high economic growth until 2014 when the prices of oil and natural gas fell. The country quickly entered into an economic crisis. The government again talked about speeding up privatizations and in 2015 devalued its own currency, the manate, by 19 percent against the dollar. This meant rising inflation and sharp increases in fuel and food prices. At the same time, the government was forced to step up until 2019 to abolish subsidies on electricity, water, gas and some basic foodstuffs (such as salt, wheat flour) for households. At the end of the 2010s, reports of lack of certain foods, such as flour, came and social unrest increased.
The Russian state-owned company Gazprom ceased to buy Turkmen gas in 2016 and the following year a conflict over the payment of gas supplies led to the shutdown of the gas taps to Iran. Turkmenistan then became highly dependent on gas imports to China (now 90 percent of the gas is sold to China). In the spring of 2019, Russia began to buy gas again, after three years of disruption, and in the fall of that year President Berdimuhamedow ordered that the entire state-owned transport sector be sold out.
Statistics on Turkmen foreign trade are uncertain, but oil and gas exports are estimated to account for as much as 80–90 percent of the export value. The remainder is mainly cotton exports. Turkmenistan also sells electricity and textiles abroad.
FACTS – FINANCE
GDP per person
US $ 6,967 (2018)
US $ 40,761 million (2018)
6.2 percent (2018)
Agriculture’s share of GDP
8.9 percent (2017) 1
Manufacturing industry’s share of GDP
60.2 percent (2017) 2
The service sector’s share of GDP
30.9 percent (2017) 3
13.4 percent (2019)
Government debt’s share of GDP
29.1 percent (2018)
US $ 781 million (2017)
Commodity trade’s share of GDP
31 percent (2018)
Main export goods
natural gas, oil, cotton
Largest trading partner
China, Turkey, Germany, Russia, USA (2017)
- source UN
2. source UN
3. source UN
Agreement on new international gas pipeline
Russia, Kazakhstan and Turkmenistan agree to jointly build a new pipeline for natural gas to be drawn north of the Caspian Sea. With the help of the management, deliveries of Turkmen gas to Russia will be easier and safer.
Suspended pensions must be paid out
President Berdimuhamedow decides that the approximately 100,000 senior citizens who have received their pension withdrawn by Nijazov will once again start getting their money paid. He also decides that the Internet should become more accessible to citizens.
Berdimuhamedow becomes new president
As expected, President-elect Berdimuhamedow wins the re-election to the presidency. He wins with just over 89 percent of the vote, according to the Election Commission, which sets the turnout to 98.6 percent. No opposition candidates are allowed to stand in the elections. In President Berdimuhamedow’s new government, several of Nijazov’s old ministers have been replaced by new politicians from the ruling Turkmenistan Democratic Party.