IMF: ‘Politics cloud Turkey’s growth outlook’
The International Monetary Fund cut its 2017 growth forecast for Turkey, citing political uncertainty and weakness in the currency. “The outlook is clouded by heightened political uncertainty, security concerns, and the rising burden of foreign-exchangedenominated debt caused by the lira’s depreciation,” the IMF said in its twice-yearly World Economic Outlook report on Tuesday. After contraction in output in the third quarter of 2016, a modest acceleration in activity is projected, with growth reaching 2.5 percent this year based on stronger net exports and a moderate fiscal stimulus, the IMF said.
The IMF said growth in the rest of the region is expected to pick up after a temporary slowdown, as rising wages in some countries support strong growth in domestic consumption. The IMF report came after Turkish President Recep Tayyip Erdogan declared victory in April 16’s close vote on constitutional changes that would concentrate more power in his office.
The government introduced measures late last year to support the economy and currency and boost domestic demand, which was hit by uncertainties following a failed coup attempt last summer. Gross domestic product expanded by 2.9 percent in 2016, slowing from 6.1 percent in 2015. The economy grew by 3.5 percent in the fourth quarter after a 1.3 percent contraction in the third quarter, the first time it had shrunk since 2009.
Economic outlook in numbers:
The IMF revises its 2017 growth forecast for Turkey to 2.5 percent from 2.9 percent
The lender maintained its forecast for 2018 growth at 3.3 percent.
Inflation is expected to be 10.1 percent in 2017 before slowing to 9.1 percent next year.
Unemployment is seen reaching 11.5 percent this year and 11 percent in 2018.