World Economy

Turkey Growth Predicted at 4.7 Percent

Turkey Growth Predicted at 4.7 PercentTurkey Growth Predicted at 4.7 Percent

Turkey’s economy will grow 4.7% in 2018 and 4.4% in 2019, according to the World Bank. In 2020, the economy will grow 4%, according to the bank’s Europe and Central Asia Economic Update report out Tuesday.

The country’s inflation is expected to reach 10.4% by the end of this year and slow down to 9% in 2019 and 8.2% in 2020, according to the bank’s latest forecast, Anadolu Agency reported.

Turkey’s current account deficit is projected to be -5.7% this year, -5.6% in 2019, and -5.5% in 2020, said the report.

“Turkey’s strong recovery in 2017 (at 7.4%) came at a cost of widening macroeconomic imbalances. Growth in 2018, however, is projected to moderate closer to potential, at 4.7%. Poverty is forecast to decrease, although at a slower pace than previous years,” the report said.

Noting that expansionary policies will likely be in place to stimulate demand, especially ahead of the upcoming elections, the report said: “Key risks include inflation and tightening of global financial conditions—all of which could constrain access to external finance, raise cost of external debt, and weaken the external balance.”

It added: “External vulnerability for Turkey remains high. The US monetary policy tightening in 2018 could increase the pace and volume of capital outflows. This increases interest and exchange rate risks for Turkey’s external debt. 

«The private sector is particularly affected as it accounts for 70% of external debt. Although most of the debt is of long-term maturity, a weaker Turkish lira and costlier external financing might adversely impact corporate balance sheets.”

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