HIGHLIGHTS (MARKET STRESS)
The severe economic crisis, triggered by the collapse in global energy prices in 2015-16, has put the government under tremendous pressure. Reports of wage arrears, wage cuts and layoffs in the public sector, and rampant inflation in the prices of consumer staples have multiplied since early 2016. In June 2017 The President Mr. Berdymukhamedov announced that the government would cease to provide free electricity, gas and water to the population, except for those most in need.
Turkmenistan has an official policy of neutrality and avoids formal engagement in multilateral organization. Diversifying gas export markets is the main aim of the government’s econo mic and foreign policy. This has taken on added urgency following Russia's halt of gas imports from Turkmenistan in January 2016 and the freeze of gas exports to Iran in January 2017. Turkmenistan is now wholly dependent on China as its sole natural-gas customer.
The authorities' main policy priority is to adjust to the impact of lower global energy prices and look for alternative markets for Turkmenistan's hydrocarbons exports. The authorities are also trying to contain the damage caused by a wide range of policies aimed at reducing the outflow of foreign exchange. The Turkmen manat continued to depreciate on the black market in the first quarter of 2018. The black market exchange rate stood at 6.6 Manat/USD in September 2017, according to Chronicles of Turkmenistan, an online news outlet, compared with the official exchange rate of 3.5 Manat/USD. By April 2018 the currency was trading at about 15 Manat/USD on the black market.
A shortage of wheat flour and bread was reported by media in the first quarter of 2018.