Fitch has changed the forecast for Turkmenistan to "Positive" at level B+
The American rating agency Fitch Ratings has changed the outlook on the long-term issuer default rating (IDR) of Turkmenistan in foreign currency from "Stable" to "Positive" and confirmed the issuer default rating (IDR) at the level of "B+".
Justifying the revision of the forecast for the IDR of Turkmenistan, Fitch mentions the following key rating factors:
Strengthening balance sheets - external and sovereign balance sheets benefit from higher energy prices. The data show a current account surplus of $4.7 billion (6.9% of Fitch's projected annual GDP), and exports for the full year on a customs basis increased by 43% compared to the same period last year.
Fitch expects to maintain a positive balance in 2023 and 2024, although it may decrease due to falling energy prices and an increase in imports associated with capital costs, according to the agency's website.
Turkmenistan's external debt has decreased to 6.1% of GDP by the end of 2022 and is projected to remain stable until the end of 2024. Sovereign net foreign assets increased by US$ 4.9 billion in 2022 to US$35.1 billion and are projected to increase by another US$5.4 billion by the end of 2024, equivalent to 54% of GDP.
Reliable external liquidity indicators: the completion of large repayments related to a specific project, combined with a jump in external assets, significantly improved the already high external liquidity indicators. External debt servicing in relation to current external receipts fell to 7.8% in 2022 from 26.8% in 2020.
Overall, Fitch provides a favorable macroeconomic outlook for Turkmenistan and expects that higher capital expenditures and continued government support for the private sector, combined with a slight increase in gas production and continued high demand for refined products, should contribute to growth in 2023 and 2024.
Fitch Ratings agency assigned Turkmenistan a long-term issuer default rating (IDR) in foreign currency at the level of "B+" with a Stable outlook in August 2021 and confirmed it in February 2022.
A B+ rating means that the country is at an average level in the group of positive ratings, and shows a strong balance in the presence of significant natural resources. The public rating is used by banks and other organizations, including those who wish to receive an independent assessment of the possibility of investing in the country.
