Country Risk Service Turkmenistan 1st Quarter

  • ID: 4454549
  • Country Profile
  • Region: Turkmenistan
  • 20 Pages
  • The Economist Intelligence Unit
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The fall in global energy prices in 2015-16 severely reduced government revenue. Assets in Bank for International Settlements-reporting banks (which The Economist Intelligence Unit believes to be a decent estimate of the country's foreign-exchange reserves) have fallen by about US$2bn since early 2015. However, at US$25bn at the end of April-June 2017, reserves remain high, and provide over 17 months of import cover. Cuts in subsidies and public-sector wage arrears point to potential weaknesses in the sustainability of the public finances in the long term. However, the external debt stock appears to be low. Poor official data present a major problem for the assessment of sovereign risk.

We believe that the manat is massively overvalued compared with its regional peers. In September 2017 the black market rate was almost double the official rate of Manat3.5:US$1. We expect the authorities to devalue the manat by about 40% in the second half of 2019.

The banking sector is badly regulated and only limited data are available. Domestic debt markets are poorly developed. According to the IMF, credit policy is highly expansionary and is expected to grow in 2018-19. Government-directed lending will adversely affect financial soundness indicators.
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Country Risk Service Turkmenistan 1st Quarter

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Rating outlook

Central scenario for 2018-19: Political stability

Central scenario for 2018-19: Election watch

Central scenario for 2018-19: International relations
Accuracy of official data

Central scenario for 2018-19: Policy trends

Central scenario for 2018-19: Fiscal policy

Central scenario for 2018-19: Monetary policy

Central scenario for 2018-19: Economic growth

Central scenario for 2018-19: Inflation

Central scenario for 2018-19: Exchange rates

Central scenario for 2018-19: External sector

Key risk indicators

Ratings summary

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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