IMF EX­PECTS POS­I­TIVE GROWTH IN TURK­ISH ECON­OMY

Dünya Executive - - OVERVIEW -

The In­ter­na­tional Mon­e­tary Fund (IMF) an­nounced in a re­port on Septem­ber 23 that it did not ex­pect Turkey to go into re­ces­sion in 2019.

The IMF pre­dicted pos­i­tive growth this year at roughly 0.25 per­cent, it said in a con­clud­ing state­ment of the 2019 Ar­ti­cle IV Mis­sion af­ter mon­i­tor­ing the eco­nomic de­vel­op­ments in the coun­try.

“Buoyed by ex­pan­sion­ary fis­cal pol­icy, rapid state bank credit pro­vi­sion, a strong con­tri­bu­tion of net ex­ports, and more fa­vor­able mar­ket sen­ti­ment, the econ­omy reg­is­tered pos­i­tive growth in the first half of 2019,” it said.

Cur­rent pos­i­tive mar­ket sen­ti­ment pro­vides “good op­por­tu­nity” to en­act a set of re­forms that would ad­dress vul­ner­a­bil­i­ties, strengthen pol­icy cred­i­bil­ity and set the econ­omy on a higher and more sus­tain­able growth path, it added.

The re­port also stressed that the lira had re­cov­ered and that the cur­rent ac­count had seen re­mark­able ad­just­ment fol­low­ing a sharp de­pre­ci­a­tion in the cur­rency in late 2018.

Im­port compressio­n, a strong tourism sea­son, im­proved mar­ket sen­ti­ment and geopo­lit­i­cal de­vel­op­ments have taken pres­sure off the lira, ac­cord­ing to the state­ment.

Clearer mon­e­tary and in­ter­ven­tion pol­icy would fur­ther boost cred­i­bil­ity, it high­lighted.

Un­der­lin­ing that in­fla­tion could drop to sin­gle dig­its over the com­ing months, it said: “High real pol­icy rates, lira sta­bil­ity, fa­vor­able base ef­fects, and re­sult­ing lower in­fla­tion have al­lowed the CBRT to cut pol­icy rates.”

Turkey is look­ing for­ward to the forth­com­ing New Eco­nomic Pro­gram (NEP), which should clearly di­ag­nose the chal­lenges fac­ing the econ­omy and out­line a com­pre­hen­sive set of poli­cies to ad­dress them, it added.

Turkey’s new eco­nomic pro­gram, an­nounced in Septem­ber 2018, tar­gets a cur­rent-ac­count­d­eficit-to-GDP ra­tio this year of 3.3 per­cent.

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