Turkmenistan Business & Economy - The Times Of Central Asia

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Natural Gas

Turkmenistan Advances Galkynysh Gas Field Development to Increase Exports to China

Chinese Vice Premier Ding Xuexiang and Gurbanguly Berdymuhamedov, Tukmenistan's former President and the current Chairman of its highest representative body, the Halk Maslahaty, have launched the fourth phase of industrial development of the Galkynysh gas field in Mary region. Located about 400 km southeast of Ashgabat, the Galkynysh field has been producing natural gas since 2013 and is considered one of the world’s largest in terms of reserves. The British consulting firm GaffneyCline estimates the reserves of Galkynysh, together with the neighboring fields Garakol and Yashlar, at 27.4 trillion cubic meters of natural gas. On April 16, the State Concern Turkmengas and China’s CNPC Amudarya Petroleum Company Ltd. signed a contract for the turnkey construction of the fourth phase of the field’s development. The project includes the drilling of production wells and the construction of a gas processing facility with a capacity of 10 billion cubic meters of commercial gas per year. According to industry publication Nebit-Gaz, the Galkynysh field is being developed in phases. The first phase, which included the construction of three gas processing plants with a total capacity of 30 billion cubic meters per year, is currently operational. The second, third, and fourth phases are planned for the near future. Upon full development, the field’s gross annual production could reach nearly 200 billion cubic meters of natural gas. The Galkynysh field serves as the main resource base for Turkmen gas exports to China. China remains the largest buyer of Turkmen natural gas. Three lines (A, B, and C) of the Turkmenistan-China gas pipeline system currently deliver approximately 40 billion cubic meters of gas annually. With the planned commissioning of a fourth line (Line D), export volumes are expected to increase to around 65 billion cubic meters per year. The resource base of Galkynysh is a key factor in the planned construction of Line D, which is expected to significantly increase gas supplies to China. According to Guvanch Agajanov, Vice-Chairman of Turkmenistan's Cabinet of Ministers, total Turkmen gas exports to China have exceeded 462 billion cubic meters over the past 20 years. The Galkynysh field has also been designated as the resource base for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, which is under construction and is expected to have a capacity of 33 billion cubic meters per year.

Economic Growth

Why Strong Economic Growth in Central Asia Masks Underlying Risks

Central Asian countries are significantly outperforming the global average in GDP growth, largely due to differing economic models across the region. However, rapid expansion does not remove deep structural vulnerabilities. As early as March, data showed that the combined economies of Central Asian countries grew by nearly 7% in 2025 compared to the previous year. The World Bank estimates regional growth at 6.2%, while the Eurasian Development Bank (EDB) places it at 6.6%. These calculations include Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan; Turkmenistan is excluded due to limited statistical transparency. By comparison, growth rates in advanced economies are much lower. The EDB expects around 1.6% growth in the U.S. and approximately 1.1% in the eurozone in 2026, while China’s economy is projected to expand by about 4.6%. Nevertheless, experts note that the region’s economic outlook remains complicated by high inflation, income inequality, and continued dependence on external factors. Investment activity and domestic demand have been the key drivers of growth, according to the EDB. Kazakhstan recorded its highest growth in 13 years (6.5%), with industry leading the expansion: mining grew by 9.4% and manufacturing by 6.4%. In 2026, the non-resource sector is expected to play a greater role. Kyrgyzstan has led the region in GDP growth for the third consecutive year: GDP grew by 11.1% in 2025 and by 9% in January 2026. In Uzbekistan, GDP increased by 7.7% in 2025 (up from 6.7% a year earlier), supported by investment, trade, services, and construction. Tajikistan’s GDP rose by 8.4% in 2025, matching the previous year’s performance. Growth continues to be driven by expanding industrial production and strong domestic demand. Early 2026 data suggest this momentum is holding. Uzbekistan’s Record In April, the World Bank highlighted Uzbekistan’s resilience to external challenges and strong growth dynamics. According to its updated report, the country’s 2025 GDP growth was revised upward by 1.5 percentage points to 7.7%. The outlook is 6.4% for 2026 and 6.7% for 2027. Key drivers include high global gold prices, investment inflows, expanded lending, and ongoing structural reforms. Rising household incomes have also played an important role, supported by remittances, which increased by 37% last year to reach $18.9 billion. By the end of 2025, Uzbekistan ranked among the fastest-growing economies in developing countries in Europe and Central Asia, alongside Kyrgyzstan and Tajikistan. The region as a whole is experiencing its highest growth rates in 14 years. At the same time, analysts point to persistent structural constraints, including a large public sector and the dominance of state-owned enterprises, which hinder private sector development. External risks, including geopolitical instability and potential disruptions in energy and fertilizer supplies, remain significant. In 2025, Uzbekistan’s GDP exceeded €133 billion, compared to approximately €56 billion nine years earlier. Over the same period, GDP per capita rose from about €1,750 to around €3,220, nearly doubling average income levels. Investment in fixed capital increased by more than 15% year-on-year in 2025, while export value grew by over 33%. Persistently high global gold prices played a major role: export...

China

Beyond the Belt and Road: China’s New Playbook in Central Asia

In the Kyzylorda Region, near the town of Shieli, the silos and conveyor belts of a Chinese-backed plant rise out of the fine brown dust that dominates the landscape. It is the kind of project the Belt and Road was supposed to deliver in Central Asia: heavy industry, fixed capital, and a visible mark on the landscape. But it is also a reminder that China’s role in the region has become narrower, more contested, and less sweeping than the old rhetoric suggested. In photographs, the Gezhouba Cement Plant looks like a self-contained industrial island on the steppe. For nearby villagers, it became something else: a source of jobs and local prestige for some, but also of years of complaints about dust clouds and whether the state was quicker to defend a flagship Chinese-backed project than the people living beside it. Projects like the plant in Shieli also help explain why views of China across Central Asia remain mixed. Beijing is seen as a source of trade, investment, and technology, but that promise is tempered in some places by concerns over transparency, environmental costs, and who really benefits when a project arrives. China has become Central Asia’s dominant trading partner, but investment has not kept pace with the surge in commerce. The gap says a lot about how Beijing now works in the region: with a sharper focus on sectors that matter to its long-term influence. In 2025, trade in goods between China and the five Central Asian states reached $106.3 billion, up 12% year on year. Chinese exports to the region totaled $71.2 billion, while imports from Central Asia reached $35.1 billion. Trade has grown fast enough to reshape the region’s external balance, but long-term investment has been far more selective. Over 2005–2025, the five Central Asian states accounted for about 3% of China’s global overseas investment and construction total. The picture changes once direct investment is separated from trade and construction contracts. China’s FDI stock in the five Central Asian states stood at about $36 billion by mid-2025. Roughly 90% was concentrated in Kazakhstan, Uzbekistan, and Turkmenistan. The structure of that capital has also changed. Extractive industries still accounted for 46% of the portfolio, but manufacturing and energy together made up more than one third, and greenfield projects rose from 43% to 60%. China has not poured money into Central Asia on the scale once implied by early Belt and Road rhetoric. Instead, it has invested in sectors that strengthen its industrial position. Kazakhstan remains at the center of this relationship. It is China’s biggest commercial partner in Central Asia, and the main destination for Chinese capital in the region. Kazakhstan-China trade reached $43.8 billion in 2024. The country’s portfolio of projects with Chinese participation includes 224 ventures worth about $66.4 billion. Some are still at the planning stage, but the range of projects is telling. Recent developments have included a hydrogen energy technology innovation center in Almaty and a large wind farm with electricity storage. Kazakhstan still sells...

Fuel Restrictions

Turkmenistan Fuel Duties Force Truck Drivers to Dump Diesel

Since early April, Turkmenistan has imposed restrictions limiting the amount of fuel in the tanks of trucks leaving the country to no more than 300 liters. Any excess fuel may be retained only upon payment of a duty of $5.72 per liter, about 20 times higher than the official domestic price. Faced with these costs, many drivers have opted to dispose of surplus diesel instead. On April 5, turkmen.news posted a video on its Telegram channel showing foreign truck drivers dumping large quantities of diesel directly onto the ground. According to the outlet, the practice is a response to the country’s fuel regulations. Foreign truck drivers are required to pay the duty in U.S. dollars at the official exchange rate, rather than in the local currency. As a result, each additional liter effectively costs about $5.70. By comparison, diesel prices in Hong Kong, often cited among the highest globally, are nearly $2 lower per liter. In Kazakhstan, diesel costs approximately $0.70 per liter, while in Uzbekistan it is around $1. Within Turkmenistan, domestic fuel prices remain heavily subsidized at roughly $0.05 per liter. Only citizens of Turkmenistan are permitted to pay the duty in the national currency, the Turkmen manat. All others must pay in dollars, which are then converted into manats at the official exchange rate of 3.5 manats per dollar. Experienced drivers transiting Turkmenistan typically obtain manats in advance for local expenses. In this case, however, the requirement to pay in foreign currency appears to serve an additional fiscal purpose. As a result, rather than preventing fuel shortages, the policy has caused environmental damage, with significant quantities of diesel dumped onto the soil. Turkmenistan drivers are also reported to engage in similar practices, particularly those traveling to or through Kazakhstan, where refueling is cheaper than paying approximately $1 per excess liter at home. The impact is not limited to environmental concerns. Freight carriers operating within Turkmenistan have already begun increasing logistics prices, reflecting the added costs associated with the new regulations.

Air Routes

Turkmenistan’s Air Connectivity Shows Little Change Despite Expansion Plans

Turkmenistan’s airport schedules remain largely unchanged, with no new destinations added and previously announced flights yet to begin operating. Plans to expand international air links from Turkmenistan have been discussed for years, but little has changed in practice. At the end of last year, Russia’s S7 Airlines announced the launch of the Ashgabat-Novosibirsk route starting March 31. Tickets went on sale at the time, with flights planned once a week. However, as of early April, the flights are absent both from the airline’s schedule and from airport data. Only connecting options remain in booking systems. No official explanation has been provided, despite considerable interest in the route. Flights from Turkmenistan to Russia remain in high demand, significantly exceeding supply. Tickets sell out almost immediately despite high prices, which passengers often associate with monopoly conditions and possible corruption schemes. At present, the choice is limited to two routes: S7 Airlines operates Ashgabat-Moscow flights, while national carrier Turkmenistan Airlines serves only the Ashgabat-Kazan route. The limited number of direct routes forces passengers to seek alternatives. One of the most common is transit through Uzbekistan. The neighboring country can be reached by land, and from there dozens of flights to Russian cities are available. At the same time, there is separate demand for travel to Uzbekistan itself, including for business, education, and tourism. Nevertheless, Turkmenistan has no direct air links with any neighboring country. The restoration of flights with Uzbekistan was discussed in 2025 by presidents Serdar Berdimuhamedov and Shavkat Mirziyoyev, but no specific timelines or routes have been announced since. Some travel takes place via Azerbaijan. In the first two months of this year, more than 4,000 citizens of Turkmenistan entered the country. A significant share of these trips is related not to tourism but to obtaining European visas, as doing so from within Turkmenistan is more difficult. Meanwhile, discussions on transport cooperation between Ashgabat and Baku have focused mainly on cargo transportation. The only notable change has been an increase in the number of flights between Ashgabat and Istanbul, driven by the foreign carrier Turkish Airlines.

Transport Corridor

Kyrgyzstan Tests Alternative Transport Route to Russia That Bypasses Kazakhstan

Kyrgyzstan and Russia are advancing plans for an alternative transport route that would bypass Kazakhstan. The proposed Southern Transport Corridor would connect the Russian port of Astrakhan across the Caspian Sea to the Turkmenbashi port in Turkmenistan and then continue overland through Turkmenistan and Uzbekistan to Kyrgyzstan. The first test cargo shipments along this corridor have already been completed, according to Russian media reports citing Kyrgyzstan’s First Deputy Prime Minister Daniyar Amangeldiyev. Amangeldiyev said Kyrgyzstan views the development of this southern route via the Caspian Sea as a promising alternative for trade between the two countries. “We’re working in this direction. We have a strategic partnership in this area and a shared vision. We are currently in negotiations,” he told Russia’s TASS news agency on April 3 on the sidelines of the CIS International Economic Forum in Moscow. Discussions on establishing the new transport corridor date back to October 2024, during the visit of then–prime minister of Kyrgyzstan Akylbek Japarov to Moscow. For Kyrgyzstan, the Southern Transport Corridor offers a way to reduce dependence on transit through Kazakhstan. At present, most cargo traffic between Russia and Kyrgyzstan passes through the territory of Kazakhstan. Trucks from Kyrgyzstan often face delays of several days at the border, creating significant obstacles for cargo transport, particularly for perishable agricultural goods. The new corridor is expected to help alleviate these bottlenecks and provide an alternative route linking Kyrgyzstan with the European part of Russia. Kazakhstan would continue to serve as the primary transit route for trade with Russia’s Siberian, Ural, and Far Eastern regions.