Our comprehensive assessment of Turkmenistan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Turkmenistan, as well as the latest industry developments that could impact Turkmenistan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Turkmenistan before your competitors.
Turkmenistan Country Risk
In light of the extreme oil price weakness into 2016, the macroeconomic and social stability outlook for Kazakhstan - the biggest oil exporter in Central Asia - has deteriorated even further, prompting us to take an even more bearish outlook on the country's growth prospects. Nevertheless, the possibility of economic and/or banking sector collapse remains limited due to the strong sovereign risk profile.
While the Kyrgyz som has been stable in recent trading against the US dollar, we expect the currency to depreciate significantly in 2016. The National Bank of Kyrgyzstan, which has propped up the som through heavy FX intervention, will discontinue this policy due to limited FX reserves. As a result, mounting depreciatory forces in the form of lower remittances from Russia and reduced gold exports will come to the fore, significantly weakening the som....
Turkmenistan Industry Coverage (6)
Defence & Security
Turkmenistan Defence & Security
BMI View: Kazakhstan's determination to develop a solid domestic defence manufacturing base has been exemplified in its strong push to setting up numerous joint ventures and partnerships with key foreign industry players as well as its efforts to organise its own international exhibition of weapons and military equipment - KADEX. With a somewhat unstable regional environment, Kazakhstan will see to its defence expenditure being increased over our forecast period in an effort to be ready to combat any potential breaches in security. However, BMI believes that if it is to truly excel in this field and achieve its goal of creating a strong...
BMI View: The small Turkmen construction market will be driven by continued government spending and increasing investment in the country's key gas infrastructure, along with major inter-regional gas and rail interconnectivity projects. However, key risks to our forecasts are falling gas demand from China and Russia, increasing macroeconomic pressures and an uncompetitive business and investment environment.
Latest Updates And Structural Trends
Construction industry growth will slow slightly in 2016 to 7.6% from 8.3% in 2015 and 9.6% in 2014 due to economic headwinds related to falling gas revenues. However, our 10-year forecast sees average annual growth of 7.8% and a value of TMT44.5bn (USD10.0bn) in 2025.
The key sectors for development will be those related...
Oil & Gas
Turkmenistan Oil & Gas
BMI View: We have strongly reduced our gas production outlook for Turkmenistan this quarter on the back of increasingly limited export options for the country: Russia and Iran are curtailing imports and Chinese gas intakes will grow at a slower pace than expected on the back of slowing economic growth. This leaves Turkmenistan increasingly dependent on China, with little credible export market alternatives over the short-to-medium term.
BMI View: Gas-fired power will remain the dominant source of electricity in Uzbekistan as strong domestic gas production, limited gas export outlets and modernisation of ageing gas-fired power generating capacity will slow efforts to diversify the power mix. Economic headwinds will further weigh on power sector expansion, as plummeting prices for gold, cotton and copper will shrink export revenues significantly - representing a pertinent obstacle to an uptick in government-backed investment.
Latest Updates And Structural Trends
The development of Kyrgyzstani and Tajikistani hydropower will remain a contentious issue in Central Asia, as Uzbekistan strongly opposes developments due to worries that the downstream of the Amu Darya and Syr Darya rivers will suffer negative...
BMI View: Turkmenistan will rely on gas-fired power generation over our 10-year forecast to 2025 as a result of substantial domestic gas supplies combined with few gas export commitments for the country. Growth in gas-fired power generation will boost electricity export potential for the country, but a lack of electricity export outlets will curb the potential for large-scale electricity exports.
BMI View: We maintain a cautiously optimistic outlook for the Central Asian telecommunications market as a whole. There are some growth opportunities in the region, particularly with regard to 3G and 4G technology Uptake. Nevertheless, state interference and political risk remains the most important risk of doing business in the Central Asian region. This was again amplified as government involvement became a key theme over the course of 2015. In Turkmenistan, a new state-owned company was created to spur competition, in Kyrgyzstan, state-owned Kyrgyz Mobile Company was sold to state-owned MegaCom and in Uzbekistan, state-owned Uzmobile launched a GSM network to better...