11/3/2016
IMF Warns Turkey’s Growth May Remain Below Growth Prospects
Quote from IMF’s Regional Economic Outlook in respect of Middle, Eastern and Southeastern Europe reads; "The growth in Turkish economy for the next couple of years may be slower. In 2016, the factors specific for one time driving the growth may be dissolved. Adverse winds caused by the decreasing confidence of the business world may impose more pressure on the investments. Such situation may cause the growth may progress much lower than the prospects."
International Monetary Fund (IMF) has issued its Regional Economic Outlook report in respect of Middle, Eastern and Southeastern Europe. IMF has confirmed the growth rates for Turkey as 3.3 percent and 2 percent for 2016 and 2017, respectively; however, it warns everyone against the vulnerability of the economy, decrease in the confidence of the business world and slowdown in the growth. According to the report, the growth in Turkish economy may get slower in the next couple of years. The slow growth in 2016 is said to be the reflection of reduced loan utilization, valuation in the actual effective foreign currency exchange rate and deterioration in the confidence of both the consumer and investor. IMF, expecting the growth in 2017 will get even slower, says that adverse winds caused by the decreasing confidence of the business world may impose more pressure on the investments. "Structural reforms should focus upon increasing the ratio of private sector savings" IMF also puts emphasis on the fact that inflationist pressures will remain high in expectation of the continuing devaluation in Turkish Lira and monetary easing. In consideration of the substantial net international investment position and the high volume of external financing, IMF reiterates the fact that Turkey is vulnerable against the sudden fluctuations in the market confidence and the structural reforms should focus on increasing the ratio of private sector savings and improve the investment environment. In the report where included an assessment indicating that the growth in Turkey in the next couple of years will be slower below the prospects, it is stated that,” in case the factors specific for one time driving the growth in 2016 may be dissolved and the adverse winds weigh more on the investments coupled with the worn-out business confidence, the growth is predicted to remain below the prospects.”
Annual Report
