ASHGABAT, Turkmenistan, August 5. Fitch Ratings has affirmed Turkmenistan's Long-Term foreign currency issuer default rating (IDR) at 'B+' with a Positive Outlook, Trend reports.
According to Fitch, The rating is supported by Turkmenistan's very strong sovereign balance sheet, with the lowest level of public debt and highest sovereign net foreign assets to GDP in the peer group, underpinned by the world's fourth-largest gas reserves.
"The current account surplus widened 4 percentage points in 2022 to 7.8 percent of GDP on better terms of trade, and sovereign net foreign assets rose from $30 billion at the end of 2021 to near $40 billion at the end of the 1st half of 2023 (50 percent of GDP, compared with the 'B' median of minus 25 percent). Fitch forecasts the current account surplus to narrow to 2.5 percent of GDP in 2025 on lower energy prices and higher imports due to increased capex, and sovereign net foreign assets to rise to $46 billion. Liquidity metrics further strengthened, with external debt service projected at 8 percent of current external receipts in 2023, down from 14.8 percent in 2021, well below the 'B' median of 17.4 percent," Fitch Ratings said.
The agency notes that the State budget returned to surplus in 2022 in the amount of 1.0 percent of GDP against the background of rising energy prices and strengthened to 2.3 percent of GDP in the first half of 2023. Revenues increased by 16 percent, while revenues from natural resources tax and income tax increased by 47 percent and 21 percent, respectively, and expenses decreased by 5 percent.
Fitch adds that all gas exports are carried out under long-term contracts without sales on the spot market, which reduced the benefits of last year's jump in world prices but means that the delayed transition continues to support revenue growth.
Fitch Ratings Inc. is an American credit rating agency and one of the most reputable global rating agencies. The agency aims to provide business intelligence to facilitate effective decision-making and decrease business risks for its clients.
