WORLD BANK TOP ECONOMIST EXPECTS NO RECESSION IN TURKEY
The World Bank does not expect recession in Turkey, the Bank’s top economist said on January 9.
“We have looked at what has happened in the past when there is a sharp currency depreciation and we have put together a data base of years and countries where depreciation was 30 percent or more than the previous year,” Franziska Ohnsorge, manager of the World Bank’s Development Economic Prospects Group, told Anadolu Agency.
“It is interesting; it does not necessarily cause recession,” she said. “A sharp depreciation is something very different than a recession. Our forecast [for Turkey] is predicated on that. What we are forecasting is that Turkey does not differ that much from those other countries which had sharp a depreciation over the last 30 to 40 years,” she stressed.
Ohnsorge noted that Turkey’s growth is expected to slow this year, predominantly on downside risks.
“We have seen a slow recovery. Recovery means 1.6 percent growth in 2019,” she noted. “This is in line with what happened in other countries that experienced sharp depreciation. It is a huge data set. Which includes Turkey 2001 [financial crisis] as well. But we take the average of all these past events over 30 to 40 years.
Net exports will continue to be strong in Turkey. Even if the Euro area slows down a bit, depreciation [of the currency] has helped exports. We do expect Turkey’s export growth to be strong.”
The World Bank expects Turkey to post 1.6 percent growth in 2019, 3.0 percent in 2020 and 4.2 percent in 2021, according to the latest Global Economic Prospects report released on January 8.
“While the outlook for Turkey is subject to considerable uncertainty, the country is expected to be weighed down by high inflation, high interest rates and low confidence, which will dampen consumption and investment. Turkish growth is expected to slow to 1.6 percent in 2019 and begin to recover by 2020 through a gradual improvement in domestic demand and continued strength in net exports,” the report said.
Turkey’s exports hit an all-time high at $168.1 billion last year, according to the country’s trade minister.