Turk­ish eco­nomic growth above 5 per­cent in the first half of the year com­pelled global eco­nomic in­sti­tu­tions, in­vest­ment banks and rat­ing agen­cies to re­vise up their es­ti­mates for Turkey

Daily Sabah (Turkey) - - Front Page -

THE TURK­ISH econ­omy’s growth rate of over 5 per­cent in the first two quar­ters of this year as a re­sult of a se­ries of gov­ern­ment and real econ­omy ac­tor ini­tia­tives and pre­lim­i­nary in­di­ca­tors led by some in­ter­na­tional in­sti­tu­tions and or­ga­ni­za­tions to in­crease their growth es­ti­mates for Turkey.

HAV­ING demon­strated a strong stance against the Gülenist Ter­ror Group (FETÖ) coup at­tempt on July 15 2016, ter­ror­ist at­tacks and fluc­tu­a­tions in in­ter­na­tional mar­kets, the Turk­ish econ­omy main­tained growth above 5 per­cent in the first half of the year with the sup­port of struc­tural re­forms.

Ac­cord­ing to data re­leased by the Turk­ish Sta­tis­ti­cal In­sti­tute (TurkS­tat), the Turk­ish econ­omy, which ex­panded 5.2 per­cent from Jan­uary to March, achieved a growth rate of 5.1 per­cent from April to June.

Some in­sti­tu­tions and agen­cies that kept their growth es­ti­mates for Turkey low be­fore the re­lease of the growth data re­vised up their fore­casts one by one after this per­for­mance.

The In­ter­na­tional Mone­tary Fund (IMF), the World Bank, Moody’s and Fitch, which are closely mon­i­tored by mar­kets with their pro­jec­tions for coun­tries’ economies, are among the in­sti­tu­tions that up­graded the growth fore­casts for the Turk­ish econ­omy.

With a growth rate of 2.9 per­cent achieved de­spite neg­a­tive devel­op­ments in the Turk­ish econ­omy in 2016, as well as the emer­gence of pre­lim­i­nary in­di­ca­tors for 2017, re­vi­sions in growth es­ti­mates came one after an­other.

First, U.S. in­vest­ment bank­ing giants Gold­man Sachs and JP Mor­gan Chase an­nounced they re­vised up growth fore­casts for Turkey at the end of March. Gold­man Sachs raised Turkey’s 2017 growth es­ti­mate from 1.8 per­cent to 2.3 per­cent. JP Mor­gan Chase pre­dicted that the coun­try would grow by 2.6 per­cent this year in­stead of 1.8 per­cent.

Gold­man Sachs said in a re­port re­leased in Septem­ber after the an­nounce­ment of sec­ond quar­ter growth data that the Turk­ish econ­omy main­tained its fore­cast of 5 per­cent growth by the end of the year and that growth in the third quar­ter of the year could be around 7 per­cent with the ef­fect of the broad-base ef­fect.

U.S.-based credit rat­ing agency Moody’s was among the or­ga­ni­za­tions that re­viewed their growth es­ti­mates for Turkey.

Moody’s, which raised Turkey’s 2017 growth fore­cast from 2.2 per­cent to 2.6 per­cent in April, raised its fore­cast to 3.7 per­cent in Au­gust. The in­ter­na­tional credit rat­ing agency raised the coun­try’s fore­cast for 2018 growth from 2.7 per­cent to 2.9 per­cent and then to 3.2 per­cent.

In the June 2017 re­port, “Global Eco­nomic Prospects (GEP),” the World Bank in­creased Turkey’s growth ex­pec­ta­tion for this year by 0.5 per­cent­age points to 3.5 per­cent. 2018 and 2019 growth es­ti­mates were re­vised to 3.9 per­cent and 4.1 per­cent, re­spec­tively. The bank’s growth fore­casts for Turkey were 3 per­cent for 2017, 3.5 per­cent for 2018 and 3.7 per­cent for 2019 in the pre­vi­ous GEP re­port pub­lished in Jan­uary. Turkey be­came the coun­try that raised the high­est ex­pec­ta­tions for growth in the re­port with up­ward re­vi­sions.

U.S.-based credit rat­ing agency Fitch Rat­ings an­nounced that eco­nomic growth rates for Turkey were re­vised up­wards after the first quar­ter growth fig­ure was an­nounced.

Fitch Rat­ings, which pre­vi­ously an­nounced Turkey’s growth ex­pec­ta­tions for this year and 2018 as 2.3 per­cent and 1.3 per­cent, re­spec­tively, up­dated its fig­ures to 4.7 per­cent for this year and 4.1 per­cent for next year. In its state­ment on the re­vi­sion, Fitch pointed out that the Turk­ish econ­omy ex­ceeded ex­pec­ta­tions in the first quar­ter of the year by catch­ing 5 per­cent growth in the first quar­ter of the year com­pared to the same pe­riod last year.

Fitch re­vised up Turkey’s growth fore­cast for 2017 from 4.7 per­cent to 5.5 per­cent this month after the sec­ond quar­ter of this year’s growth was an­nounced.

Mor­gan Stan­ley, an in­ter­na­tional fi­nan­cial ser­vices and in­vest­ment bank­ing firm in the United States, also an­nounced that it raised the pro­jected growth rate for the Turk­ish econ­omy this year from 3.3 per­cent to 4.3 per­cent in Septem­ber.

Mean­while, Ja­panese fi­nan­cial in­sti­tu­tion No­mura in­creased Turkey’s growth fore­cast for this year from 4.2 per­cent to 5.5 per­cent in the same pe­riod.

Amer­i­can in­vest­ment bank JP Mor­gan, on the other hand, raised Turkey’s fore­cast for 2017 from 4.6 per­cent to 5.3 per­cent, while main­tain­ing its growth ex­pec­ta­tion for next year at 3.1 per­cent.

Fi­nally, the IMF raised its growth ex­pec­ta­tion for Turkey from 2.5 per­cent to 5.1 per­cent in 2017 and from 3.3 per­cent to 3.5 per­cent in 2018.

In­dus­trial out­put, a vi­tal gauge of the gross do­mes­tic pro­duc­tion, in July and Au­gust rose 14.5 and 5.2 per­cent, re­spec­tively. The year-on-year in­crease in in­dus­trial out­put in the third quar­ter points out that growth per­for­mance is very likely to con­tinue in the re­main­ing half of the year.

The Turk­ish econ­omy se­cured 5.1 per­cent growth in the first half of the year.

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