Serdar Berdimuhamedov assumed the presidency of Turkmenistan on March 19, 2022. As of March 2024, he commemorated the two-year anniversary of his presidency. The Progres.online team examines the fluctuations in the Palaw Index prices since the beginning of his presidency in 2022.
The Palaw Index encompasses the prices of essential commodities such as rice, sunflower oil, onion, beef, carrot, and wheat flour. The average serving of palaw, calculated to accommodate a family of four (two adults, two children), experienced pricing shifts, standing at 59 manat in 2020 and 92.1 manat in 2021 prior to his presidency. Since assuming office in 2022, the average palaw price reached 82.5 manat in 2022 and 71.5 manat in 2023, surpassing the 2020 price.
Turkmenistan’s wages witness an annual increase of 10%. Consequently, the comparison of palaw portions purchasable with a minimum wage rose from 14.7 portions in 2020 to 16.2 portions in 2023.
Analyzing the average year-on-year changes in palaw prices in Turkmenistan, a 51.5% increase was noted between March 2021 and March 2022 before Berdimuhamedov’s presidency. Following the beginning of his first year of presidency, the average year-on-year change in palaw prices witnessed an 11.2% decline between March 2022 and March 2023, followed by a further 16% decrease between March 2023 and March 2024. However, these declines cannot be solely attributed to his economic policies.
The major factors that impacted palaw prices: Turkmenistan’s reopening after two years of isolation and travels bans during the Covid-19 pandemic, global reduction in food prices, especially for vegetable oil and wheat flour, and the stabilization of the black market exchange rate.
First, Berdimuhamedov’s presidency coincided with Turkmenistan emerging from its self-imposed isolation during the Covid-19 pandemic, characterized by a near 51.5% inflation rate amidst reduced imports and the highest exchange rate in two decades. Therefore, the subsequent price decreases in 2022 and 2023 were indicative of a return to normalcy as the country reopened post-pandemic.
Second, global prices experienced a downturn in 2023, evident in the FAO’s Food Price Index, which recorded an average decrease of 13.7% primarily driven by increased global supplies of vegetable oil and wheat flour – key ingredients in the Palaw Index – significantly influencing the price decline.
Thirdly, the black-market exchange rate plummeted from its 2021 peak of 40 manat/USD to 19 manat in 2022, further contributing to the decline in palaw prices in subsequent years. As the exchange rate stabilized at 19 manat to the present day, its impact on palaw prices has diminished.
The aforementioned factors underscore that the decline in the Palaw Index in 2022 and 2023 cannot be solely attributed to Serdar Berdimuhamedov’s economic policies but to a higher extent to external factors such as declines in global food prices.
