Turkmenistan Business & Economy - The Times Of Central Asia

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Energy Security

Central Asia Electricity Demand Expected to Rise 27% by 2030, EDB Says

Electricity demand across Central Asia is expected to increase by 27% by 2030, putting additional pressure on the region’s power grids, according to the Eurasian Development Bank. Arman Akhunbayev, head of the bank’s Center for Sectoral Analysis, announced the projection during an October 29 presentation of its report, Energy Without Borders: The Architecture of Power Connectivity in Central Asia. “To prevent energy shortages from becoming an obstacle to economic growth, generation capacity and power grids must be prepared now for new factories and expanding cities,” Akhunbayev said. The bank stressed that building additional power plants alone would not be enough. With countries in the region planning to add more than 35 gigawatts of new solar and wind capacity by 2035, it called for grid upgrades and investment in energy storage and backup generating capacity. The report noted that during peak demand on December 10, 2024, around 6.6 gigawatts of generating capacity in Central Asia’s interconnected power system was unavailable or restricted because of technical and resource constraints. In a separate report published in March, the bank had projected that electricity consumption could reach 370 billion kilowatt-hours annually by 2030, up nearly 40% from around 270 billion in 2024. The October presentation does not specify the baseline for its 27% forecast.

Economic Transparency

Turkmenistan Meets IMF After Report on Missing Data

Turkmen officials and a representative from the International Monetary Fund met in Ashgabat, weeks after the IMF concluded that Turkmenistan breached its obligations as a member country by not providing key data. Turkmenistan’s Ministry of Foreign Affairs did not mention the IMF's September finding in a statement about the meeting on October 28, saying that the two sides discussed “prospects” for further cooperation. It said the lead participants in the meeting were Ahmet Gurbanov, deputy foreign minister, and Anna Bordon, head of the IMF’s mission for Azerbaijan and Turkmenistan. “The sides emphasized the importance of cooperation with international financial institutions in the context of strengthening macroeconomic stability, improving economic mechanisms and exploring modern approaches to addressing current economic challenges,” the Turkmen ministry said. On September 11, the IMF Executive Board said Turkmenistan had breached its obligations as a member country by failing to provide data “necessary for the IMF’s activities.” The board said “Turkmenistan has not provided key required data, including information on international reserve assets, official holdings of gold and foreign exchange, and a complete balance of payments.” It said the failure to provide the data “could not be explained by a lack of capacity” and that the board would meet within six months to review Turkmenistan’s progress in rectifying the situation. The Washington-based IMF requires its 191 member countries to provide such data for economic surveillance, policy analysis, and the assessment of potential vulnerabilities. Turkmenistan, which is estimated to have the world’s fourth-largest proven reserves of natural gas, does not have a loan program with the IMF. However, IMF technical experts have assisted the Ministry of Finance in areas including budgeting. The IMF said in June that it projected economic growth in Turkmenistan to moderate to about 2.4 percent this year, “reflecting capacity constraints in the hydrocarbon sector and persistent structural inefficiencies associated with the large state footprint in the economy.” Turkmenistan has sought to expand tourism and increase diplomatic and economic contacts. But it remains a highly controlled state, and it can be difficult for outsiders to obtain economic and other information about the country.

International Flights

Turkmenistan Airlines Increases International Flights

Turkmenistan Airlines is increasing the frequency of several international flights under a revised schedule that took effect on October 25. “Direct flights from the capital to Seoul will double from one to two flights per week. On the Italian route to Milan, flight frequency will increase from two to three flights per week,” the state-run Turkmenistan News Portal said before the new schedule took effect. “Regular flights on the Ashgabat–Kazan route will increase from four to six flights per week. Additionally, air service to Istanbul will be expanded, with total flight frequency reaching 13 flights per week compared to the previous 12,” the news site reported. It said the updated schedule, which includes return flights to Ashgabat International Airport, is aimed at meeting growing demand for air travel and is another step “in integrating the country's civil aviation infrastructure into the global transport network.” At the same time, the number of flights to New Delhi was scheduled to be reduced from three to two per week, according to Turkmen media. The flight frequency on other routes, including Beijing, Bangkok, Kuala Lumpur, London, and Frankfurt, is unchanged under the new schedule. Turkmenistan has invested in airport infrastructure and seeks to attract more international carriers. In August, Air Belgium made its first cargo flight to Ashgabat International Airport as Turkmenistan aims to establish itself as an air cargo hub between Asia and Europe. Elsewhere in Central Asia, Kazakhstan and Uzbekistan have taken particularly robust steps to develop their international profiles in civil aviation. Early this month, the lower house of Tajikistan’s parliament ratified an air transport agreement between the Tajik government and the United Arab Emirates that would allow more flights between the two countries and help develop Tajikistan’s role in international aviation.

Gas Exports

At Ashgabat Conference, Turkmenistan Seeks Wider Gas Export Markets

About 700 foreign participants attended an annual oil and gas conference in Turkmenistan, a 40% increase over the previous year, according to one of the organizers. Chinese and Malaysian firms had an especially strong presence. The three-day conference, titled Oil and Gas of Turkmenistan 2026, ended on Friday. It came as the global energy industry faced volatility and supply disruptions linked to conflict in the Middle East and the effective closure of the Strait of Hormuz, a key transit corridor for international energy markets. The number of foreign participants at the conference in Ashgabat was a “record,” according to Nazar Atajanov, director of the Turkmen Energy Forum, which organizes events for the country’s oil and gas sector. State institutions Turkmengaz, Turkmennebit, and Turkmengeologiya helped organize the event, according to the Turkmenportal news outlet. Atajanov said artificial intelligence was among the discussion topics because oil and gas companies are increasingly using AI, the outlet reported. Separately, Turkmenistan supports the Trans-Caspian Gas Pipeline project and stands ready to supply it with gas, said Maksat Babayev, chairman of Turkmengaz. “He noted that the country is interested not only in the gas pipeline itself, but also in the Trans-Caspian corridor as a whole — including the laying of cables, logistics routes, and port infrastructure,” Turkmenportal reported. Babayev said supplying the route would require further development at the Galkynysh gas field. Turkmenistan’s interest in the project, which has been in the planning stages for many years, reflects its efforts to diversify energy exports at a time of upheaval in traditional transit corridors, including in the Middle East as well as Russia, whose war with Ukraine has reshaped regional energy trade. Turkmenistan has the fourth-largest natural gas reserves in the world. While the country mainly exports to China, it has been stepping up efforts to develop alternative routes and expand its customer base. Turkmenistan “places great importance on expanding natural gas export routes,” President Serdar Berdimuhamedov said in a message to conference participants. As an example, he mentioned the construction of the Turkmenistan–Afghanistan–Pakistan–India gas pipeline (TAPI), saying there had been progress in laying the pipeline in Afghanistan’s Herat province. The TAPI project, however, has faced years of delays and challenges in its implementation. As the conference in Ashgabat was continuing, Turkmenistan’s representative to the European Union met François-Régis Mouton de Lostalot, managing director of the European division of the International Association of Oil and Gas Producers. Turkmen Ambassador Sapar Palvanov spoke about collaboration between his country and European energy interests, according to Turkmenistan’s embassy in Brussels, Belgium. “Particular attention was paid to prospects for transporting Turkmen natural gas to the European market, including the development of energy infrastructure in the Caspian region,” the embassy said.

Growth Forecasts

Central Asia Economic Growth Expected to Slow in 2027

After several years of rapid expansion, Central Asian economies are expected to lose some momentum. The European Bank for Reconstruction and Development (EBRD) forecasts that regional economic growth will slow from 5.8% in 2026 to 5.3% in 2027. However, growth in manufacturing and construction will not necessarily translate into comparable increases in household incomes. The forecast appears in the EBRD’s September report. The bank’s Central Asia figures also include Mongolia, so the regional growth rate should not be interpreted as an average for the five Central Asian countries alone. The Eurasian Fund for Stabilization and Development (EFSD) has published its own projections for Kazakhstan, Kyrgyzstan, and Tajikistan. They differ somewhat from the EBRD’s forecasts but also anticipate continued economic growth. Kyrgyzstan and Tajikistan Maintain Strong Growth The EBRD expects the economies of Kyrgyzstan and Tajikistan to grow by 7% in 2027, the highest rates projected for the five countries in the region. Kyrgyzstan has experienced a construction boom in recent years, driven by investment in roads, housing, and energy infrastructure. The service sector is also expanding. The country’s economy grew by 11.9% in the first half of 2026. However, rapid growth has been accompanied by rising food and fuel prices. The country's performance is closely tied to economic conditions in Russia, where a significant number of Kyrgyz migrant workers are employed and from which Kyrgyzstan imports the vast majority of its fuel. Changes in the Russian labor market can affect remittances and household spending in Kyrgyzstan. In Tajikistan, growth is supported by investment and exports, particularly precious metals and mineral resources. The economy expanded by 8.2% in the first half of 2026. Tajikistan also relies heavily on imported goods and equipment, with spending on imports exceeding export earnings. Remittances from migrant workers in Russia are an even more important source of household income for Tajiks than for their Kyrgyz neighbors, while rising fuel costs are putting additional pressure on family budgets. Kazakhstan Remains Dependent on Oil Exports For Central Asia’s largest economy, the EBRD forecasts growth of 4.5% in 2027, while the Eurasian Fund for Stabilization and Development expects 5%. In 2026, Kazakhstan’s economy has been constrained by disruptions to oil production and exports. Problems arose at the Tengiz oil field and along the Caspian Pipeline Consortium (CPC) export route, through which a significant share of Kazakhstan’s oil reaches global markets via Russia. Meanwhile, Kazakhstan’s factories increased production. But even growth in industries outside the oil sector has yet to eliminate the country’s dependence on commodity exports. For international buyers, the reliability of supply routes is also important. Disruptions to the CPC can restrict Kazakhstan’s oil exports regardless of demand or global prices. The Times of Central Asia recently examined the challenges facing Kazakhstan’s oil logistics. Inflation is another concern. According to the EFSD, prices in Kazakhstan are expected to rise by approximately 9.5% by the end of 2026. This means economic expansion will not necessarily be accompanied by a noticeable improvement in household purchasing power. Uzbekistan’s Growth Driven by...

Innovation Rankings

Central Asia in the Global Innovation Rankings: Supercomputers, Engineers, and the Economics of Government Ambitions

In the Global Innovation Index (GII), published on September 29 by the World Intellectual Property Organization (WIPO), Kazakhstan climbed eight places to rank 73rd among 139 economies. Uzbekistan ranked 77th and Kyrgyzstan 92nd. Tajikistan placed 112th, while Turkmenistan was not included in the study. The overall rankings, however, conceal some interesting details. Uzbekistan ranks second worldwide in the share of graduates in science and engineering. Kyrgyzstan ranks second in labor productivity growth, while Tajikistan leads in utility model applications relative to the size of its economy. Utility models are a simpler form of patent protection, usually for smaller inventions. Such strong results in individual indicators stand in contrast to the countries' relatively modest overall rankings. Part of the explanation lies in the study's methodology. WIPO evaluates education and scientific capacity alongside infrastructure and investment. It also considers business activity and research output. A country may train large numbers of engineers or register technical innovations while lagging in research output and investment, with limited commercial activity. For Central Asia, the rankings also offer a way to compare economic performance with the scale of governments' technological ambitions. Kazakhstan: Supercomputers in Search of Customers In recent years, Kazakhstan has assembled an impressive portfolio of digital projects. The Alem.Cloud and Al-Farabium supercomputers, along with the Data Center Valley project in Ekibastuz, are intended to improve the country's computing infrastructure. The Alem.ai artificial intelligence (AI) center and the KazLLM and AlemLLM large language models are designed to develop its AI capabilities. Training opportunities are also expanding through AI-Sana and Tomorrow School, with TUMO Astana offering education in AI and other digital fields. However, the wider use of AI remains relatively modest. The Digital Qazaqstan strategy through 2029 cites figures for the second half of 2025 showing that generative AI adoption in Kazakhstan stood at 13.7%, compared with a global average of 16.3%. Kazakhstan ranked 24th in the United Nations (UN) E-Government Development Index in its 2024 survey but 73rd in the 2026 GII. Kazakhstan's digitalization model has long centered on government services. The country's high position in the UN study reflects this focus. Commercial technologies present a more complicated picture: here, the government must rely on research teams, private developers, investors, and customers willing to pay for their services. The arrival of supercomputers expands the country's technical capabilities. How extensively they will be used outside government projects remains to be seen. Uzbekistan: Engineering Education and IT Services Exports The country has long focused on workforce development for the IT industry. An export-oriented digital services sector is growing around IT Park. Foreign companies are operating in the country, while training programs in programming and AI are expanding. Tashkent intends to support its workforce development policies with domestic computing infrastructure. Under the AI development strategy adopted in 2024, Uzbekistan plans $50 million in AI infrastructure spending and the training of one million specialists. AI laboratories are also planned at 15 universities. A smaller supercomputer is already operating, and preparations are underway to acquire a more powerful system....