ISTANBUL: The Organization for Economic Cooperation and Development (OECD) has significantly raised its 2017 growth forecast for Turkey to over 6 percent, by citing strong fiscal stimulus and rebound in exports.
“Economic growth is estimated to have exceeded 6 percent in 2017, driven by strong fiscal stimulus and an export market recovery,” the OECD said in a note of its latest outlook on Turkey, which was released on Nov. 28.
“It is projected to edge down but to stay between 4.5 percent and 5 percent in 2018 and 2019,” it added.
The OECD’s previous Turkey growth forecast for 2017 was 3.4 percent, up from 3.3 percent. Its 2018 forecast was 3.5 percent in the previous report.
The OECD also warned of several uncertainties regarding the Turkish economy, urging restoration in investor confidence.
“If regional and domestic uncertainties were to be reduced, including through progress in the updating of the Customs Union agreement with the European Union, a stronger acceleration in domestic and international business investment could lift growth onto a stronger path. If, in contrast, uncertainties grow in these areas, confidence would weaken, international financing conditions may tighten and growth would be slower,” it noted.
The OECD also said that consumer price inflation remained far above the target and disinflation is projected to be slow.
The increase in the OECD’s growth outlook for Turkey followed the International Monetary Fund upping Turkey’s 2017 growth forecast 2.6 percentage points on Oct. 10, the World Bank raising its forecast 0.4 percentage points on Oct. 19, the European Bank for Reconstruction and Development (EBRD) lifting it by 2.6 percentage points on Nov. 7 and the EU increasing by 2.3 percent on Nov. 11.
Turkey’s economy expanded beyond forecasts in the first quarter (5.2 percent) and second quarter (5.1 percent) of this year, according to the Turkish Statistical Institute (TÜİK).
