Turkey Growth Seen at 3%

Turkey’s economy is expected to grow 2.9% this year, the International Monetary Fund said.

The preliminary findings in a staff report were made after the fund visited Turkey at the end of last month and will not be made official until it is presented to the IMF’s Executive Board later this year, Anadolu Agency reported.

“The Turkish economy has withstood several shocks,” staff wrote in a statement that made note of political uncertainty, a decline in tourism revenues and high corporate debt.

A drop in tourism revenues was, however, offset by lower energy prices, since Turkey is heavily dependent on oil and gas imports, but has enjoyed lower prices in the past two years.

“Some fiscal loosening is appropriate to support the economy,” the staff advised, adding that “the increase in public investment is welcome” and the central bank should focus on increasing its reserves.

The report also noted Turkey’s current account deficit is projected to be 4.5% of GDP this year, but widen in 2017 because oil prices are expected to increase next year.

Inflation is anticipated to be about 8% in 2016 and 2017.

The IMF said in its World Economic Outlook at the beginning of October that it expects Turkey’s economy to grow 3.3% this year.

Meanwhile, Turkey’s outlook was revised up to ‘stable’ from ‘negative’, global ratings agency Standard & Poor’s said.

The upgrade reflects the Turkish economy’s resilience against regional and domestic risks, as the agency said it believes Turkish policymakers would continue to implement reforms for economic stability.

“Government policy is gradually refocusing on measures to reduce external vulnerabilities, albeit in the presence of weaker growth and moribund private investment, S&P said in a statement.