WORD BANK EXPECTS MODERATE GROWTH FOR TURKEY IN 2018
The World Bank predicts that the global economy will grow 3.1 percent this year, which would be its best showing in seven years. The United States, the world’s largest economy, is expected to receive a boost from the $1.5 trillion tax cut package Congress approved last month.
The World Bank on Tuesday upgraded its global growth forecast for 2018 by 0.3 percentage points from the projection it made in June. It is also forecasting solid growth of 3 percent in 2019 and 2.9 percent in 2020, after a similar 3 percent expansion in 2017. The U.S. economy will grow 2.5 percent this year, the World Bank now predicts, up 0.3 percentage points from its June estimate. Its forecast shows U.S. growth slowing to 2.2 percent in 2019 and 2 percent in 2020.
“Stronger than expected rebound”
Aided by fiscal and monetary policies that led to “a much stronger-than-expected rebound,” Turkey’s economic growth projection for 2017 was revised up to 6.7 percent from 4 percent, the World Bank Group said. “The significant rebound in Turkey’s growth last year - to 6.7 percent, from 3.2 percent in 2016 - was supported by fiscal stimulus aimed at expediting recovery from the economic repercussions of the 2016 failed coup attempt,” according to the bank’s Global Economic Prospects report.
Export growth also increased due to higher demand from the European Union (EU) and Turkey’s currency depreciation in 2016, the World Bank said. In addition, strong growth in the working-age population supports a positive outlook for the country’s potential growth. The World Bank warned that rising disagreements among some countries with the EU could deter international investors and lead to an end to EU accession for Turkey. “Growth in Turkey is projected to moderate to around 3.5 percent in 2018, as the impact of the 2017 fiscal measures fades,” the report said. The Word Bank expects Turkey’s economy to expand 4 percent in 2019 and 2020.
In its report released Tuesday, the World Bank credited the widespread global rebound, after years of tepid growth, to stronger investment, rising manufacturing activity and increased trade flows. “The upturn is broad-based, with growth increasing in more than half of the world’s economies,” the report said.