IMF Raises Turkey Growth Forecast

The International Monetary Fund on Friday raised Turkey’s growth forecast for 2018 by 0.5 percentage points to 4%, Anadolu Agency reported. The IMF also said it expects Turkey’s economy to expand by 7% in 2017, which is “well above potential”. “In 2017, a sizable credit impulse—driven by state loan guarantees—and fiscal policy supported the economy, at a time when domestic demand seemed anemic. Exports increased sharply, due to stronger external demand, against the backdrop of a softer (Turkish) lira,” the IMF said in a statement. Due to strong growth in 2017 “the output gap now appears positive, with symptoms of associated imbalances,” the statement added. The IMF said it expected “some moderation” in Turkey’s growth this year, “reflecting in part a weaker policy-driven impulse.” Turkey’s economy grew 5.2% in the first quarter of last year, 5.1% in the second quarter and staggering 11.1% in the third quarter. Turkish officials also expect growth in 2017 to stand at around 7%.