Today, the International Monetary Fund has issued a 2017 Consultation Press Release for Turkmenistan. Turkmenistan, a big natural gas producer, continues to adapt to external factors, including persistently low oil and gas prices, a decline in economic activities in the trading partner countries, the press release says. - Growth rates remain stable, standing at over 6 percent within the past two years or so. This has been contributed by increased natural gas exports to China, the extensive credit policy and industrial import substitution and export development policy. The national budget is low, running at 1¼ percent of GDP last year; however the current account deficit has climbed to 21 percent of GDP. The official authorities have started to modify the policy given a fall in oil and gas prices. The efforts made over the last couple of years, include state investment reduction, gradual easing of a currency exchange rate, and one-time raising of utility rates. The state administration bodies have also stepped up their activities on building the national production base. Large-scale plans have been adopted to boost gas production, construct new pipelines, stimulate the petrochemical industry, expand the production and processing of natural resources apart from hydrocarbons, and support the private sector development. Over the next few years, Turkmenistan’s macroeconomic indicators are expected to remain uneven, including the continuing growth, moderate inflation and balanced budget, but along with remaining external factors. Modest growth acceleration is forecast from 6.2 percent last year to 6.5 percent in 2017. As predicted, inflation will be moderate running at 6 percent; the state budget is expected to be closely balanced. At the same time, the external deficit is projected to remain considerable, standing at 11 percent in the midterm, given low oil and gas prices and high levels of state investment. The press release offers an assessment of the IMF Executive Board: Executive directors have positively evaluated the policies adopted by the official authorities over the past two years to adjust to the unfavorable external conditions, particularly to the falling oil and gas prices. Alongside with that, the directors have said that considerable external imbalances remain unchanged, having highlighted the need to additionally update the economic policy to reduce the current account deficit in parallel with the introduction of reforms aimed at encouraging steady, sustainable and all-round development. The directors consider the current account deficit reduction to be a priority task in the short term. According to a shared opinion, a package of measures that includes cutting-back on state investments, reduced loan growth, easing of a currency exchange rate could contribute to modifying the policy. The directors stress the need to protect vulnerable strata of the population, while going through the adjustment process. At present, the fixed currency rate is reasonably sufficient however in the midterm the considerable flexibility of the rate could facilitate the adaptation to external shocks and changes in macroeconomic conditions and lay the foundation for upgrading the monetary policy. The abolition of currency restrictions on ongoing international operations could enhance economic efficiency. The directors also highlight that the low oil and gas prices prove the need for structural reforms to further economic diversification and the private sector growth. They recommend improving the business and legislative environment, while advancing steadily on the road of reforms and privatization of state enterprises, cutting state investments, making them more efficient, and focusing close attention on social protection and developing human capital. In general, they believe that there is need for the state’s gradually diminished role in planning and coordinating economic activities. The directors expect that the planned comprehensive financial regulatory reform will bring Turkmenistan’s legislative system into conformity with the Basel Accords. In the light of the high rates of loan growth and the practice when the state plays a leading role in directed lending of projects, the directors recognize the advisability of making the prudential regulation more rigorous; streamlining the selection of loan projects and raising awareness of currency risks, while improving corporate and bank risks management. The directors recommend the official authorities to handle gaps in the data and to expand the country’s budgetary, financial and foreign economic statistics. It could enable people concerned to understand better the macroeconomic trends and official bodies’ intentions for the policy, could stimulate foreign investments and provide easier access to the global financial markets.