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Investing.com -- Fitch Ratings has affirmed Turkmenistan’s Long-Term Foreign-Currency Issuer Default Rating at ’BB-’ with a Stable Outlook on Monday.
The rating reflects Turkmenistan’s extremely strong sovereign balance sheet, with the highest sovereign net foreign assets to GDP ratio and lowest public debt among peers in the ’BB’ and ’B’ categories. These strengths are supported by the country’s position as holder of the world’s fourth-largest gas reserves.
Turkmenistan’s external finances remain robust, with sovereign net foreign assets projected to stay at 50.8% of GDP in 2027, significantly higher than the ’BB’ median of 2.7%. Foreign exchange reserves are expected to cover 52.1 months of current external payments, well above the ’BB’ median of 4.7 months.
The country continues to maintain a fixed official exchange rate of 3.5 per US dollar, unchanged since 2015, despite a parallel market rate of around 19 since mid-2022. This gap persists even with improved external liquidity, and Fitch expects the official rate to remain unchanged through 2027.
Natural gas production, which accounted for 67% of total exports in 2024, is projected to decline modestly in 2025 before increasing in 2026. Exports remain heavily concentrated to China, which received 88% of Turkmenistan’s gas exports in 2024.
Fitch forecasts a modest rise in the general government fiscal deficit to 0.2% of GDP in 2025 and 0.4% in 2027, from an estimated 0.1% in 2024. General government debt is expected to decrease to 2.9% of GDP by end-2027, from an estimated 3.5% at end-2024.
The Turkmenistan Stabilisation Fund reached TMT30.9 billion at end-2024, with TMT17.1 billion (5.9% of GDP) held as fiscal reserves at the central bank.
GDP growth is forecast to moderate to 2.3% in 2025, from 3.0% in 2024, and remain around this level until 2027. Headline inflation is expected to reach 5.5% in 2027, up from 4.0% in 2025.
Fitch noted that Turkmenistan’s strengths are balanced against weak governance, unconventional economic policy, a challenging business environment, high commodity dependence, and export market concentration.
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