Country Series: Turkmenistan

As part of its initiative to introduce Pakistani traders and industrialists to non-traditional markets, the Pakistan Business Council (PBC) has initiated a series of five Country Profiles highlighting the opportunities in the Central Asian Republics. This Country Profile covering Turkmenistan is the third in the series.

Turkmenistan is located in Central Asia, and is bordered by Iran, Afghanistan, Uzbekistan, and Kazakhstan. It has a total area of 488,100 km², and a population of 5.66 million (2016).

The table below shows a comparison between Pakistani and Turkmen economies. Turkmenistan has a small population of 5.66 million compared to Pakistan’s 193.20 million (2016). Even though Turkmenistan’s real GDP is lower than that of Pakistan, it enjoys a higher GDP per capita and GDP growth rate. However, Turkmenistan’s inflation rate is higher than Pakistan’s.

Pakistan Turkmenistan
2014 2015 2016 2014 2015 2016
Total Population (Millions) 185.55 189.38 193.20 5.47 5.57 5.66
GDP (Constant 2010 US$ Billions) 206.18 215.89 228.29 34.98 37.25 39.56
Real GDP growth (%) 4.70 4.70 5.70 10.30 6.50 6.20
GDP per capita (Current US$) 1,316.00 1,431.00 1,468.00 7,962.40 6,432.70 6,389.30
Inflation 7.20 2.50 3.80 4.42 7.00 6.17

Turkmenistan’s industrial sector generates 47.7% of the GDP, while services and agriculture contribute 39.2% & 13.2% respectively. Trade plays a major role in the economy with natural gas as the main export item. This, however, puts the economy at risk in case of changing global energy prices.  Over the years, trade has been facilitated by Turkmenistan’s international transport linkages (gas pipelines, international seaport, and railways) and agreements with trading partners. Oil, gas, agriculture, and construction are the main sectors for foreign direct investment, although FDI in the country remains low.

Trade contributes 84.0% to the GDP of Turkmenistan. In 2016, Turkmenistan exported $7.42 billion worth of goods which included gas, petroleum oils, fertilizers, polypropylene, textiles, and cotton fiber. China followed by Turkey, Italy and Russia are the top export partners of Turkmenistan. Imports in 2016 totaled $4.66 billion which mainly comprised of machinery, equipment, mechanical appliances, iron or steel, furniture, vehicles, etc. Turkmenistan’s top import partners are Turkey, Russia, China, Germany, Japan and the Republic of Korea.

Trade with Pakistan has been entirely in favour of Turkmenistan over the past ten years. In 2016, imports were $4.00 million, and exports stood at $24.96 million, resulting in a trade surplus of $20.96 million. Cotton  is the  largest export to Pakistan, and vegetable or animal fats and oils are the most imported commodities from Pakistan. Turkmenistan has the potential to increase its export of cotton, urea and polypropylene to Pakistan. On the other hand, Pakistan can enhance its supply of wheat and medicament to Turkmenistan. In 2016, Turkmenistan’s trade potential with Pakistan for top ten products amounted to $186.68 million for imports and $322.32 million for exports.