IMF Lifts Turkey’s Growth Forecast

The International Monetary Fund on Thursday revised up its forecast for Turkey’s economic growth in 2018 and 2019 to 4.3% while it warned the global positive momentum may eventually slow down in the medium-term.

In its “Global Prospects and Policy Challenges” report, published before Monday’s G20 finance ministers meeting in Buenos Aires, the IMF raised the expected real GDP growth of Turkey to 4.3% from its previous forecast of 3.5% published in its outlook report last October, Anadolu Agency reported.

The report said IMF had raised its global GDP growth forecasts in January to a robust 3.9% for 2018 and 2019, linking with the “broad-based” momentum gained in the second half of 2017 with stronger-than-expected outcomes in the eurozone, Japan and the United States.

The report, however, warned that the positive momentum expected will eventually slow, challenging medium-term outlook for many countries.

The IMF said the prospects for emerging economies were more positive as the benefits of earlier reforms may have run their course.

Meanwhile, Turkey’s industrial output rose an annual 12% in January, almost double economists’ expectations. Output climbed as mining and quarrying production surged 23% and manufacturing output climbed 12.3%, the state statistics agency said on Friday. Overall output was expected to increase 6.7%.

Month-on-month production dropped 0.8% from December, partly reversing December’s 2.2% rise. Economists had expected it to contract 1.2%.

Turkey is seeking to boost economic growth by providing loan guarantees and tax incentives to producers, raising concern that the economy is overheating. Economic growth exceeded 11% year-on year in the third quarter, though slowed on a quarterly basis.

Turkish growth has confounded economists’ expectations and the government has pledged further incentives for companies and consumers this year.