Positive growth outlook remains, but for how long?
In the International Monetary Fund’s latest assessment of the Turkish economy published on July 18, one criticism lent the report a bleak tone regarding over optimistic macroeconomic data. Official economic forecasts have had an optimistic bias in recent years, overestimating real GDP growth by one percentage point and underestimating inflation by 2.5 percentage points for the year ahead, the IMF said in its latest report on fiscal transpar- ency in the country. The economy grew by 2.9% in 2016, slowing from 6.1% in 2015. Government forecasts had pegged growth at 4.4% this year and see a 5% expansion in 2018. With this criticism in mind, the positive outlook for the Turkish economy still remains through the aid of government incentives for industry as well as support to consumers on the taxation front. In various reports by respected investment houses below, three economists agree that developments are positive in the short term, but that mid-term challenges over inflation and limited foreign direct investment (excluding real estate and portfolio investments) are likely to remain for the foreseeable future.