The World Bank has raised Turkey’s economic growth projections for the next three years, according to its Global Economic Prospects report published this week. In a similar fashion, The Organization for Economic Co-operation and Development (OECD) also raised Turkey’s growth forecast for the year to 3.4 percent, up from 3.3 percent.
Turkey’s economy is now expected to expand 3.5 percent in 2017, up from an estimate of 3 percent in January.
Last year, Turkey’s economy grew by 2.9 percent, down from 6.1 percent in 2015 and 5.2 percent in 2014.
“Turkey is projected to expand by 3.5 percent in 2017, supported by accommodative fiscal policy, and by 3.9 percent in 2018, up 0.4 percentage point from previous estimate for both years, as uncertainty abates, tourism recovers, and corporate balance sheets mend,” the bank said.
“A forecast upgrade for Turkey due to the faster-than-anticipated recovery after the failed coup attempt is offset by a downward revision in Russia due to the extension of economic sanctions,” it argued.
The bank said the upward revision to Turkey is partially due to a reassessment of potential growth and signs of less severe effects of last year’s failed coup, which left 250 people dead and around 2,200 wounded.
In a similar fashion, The Organization for Economic Co-operation and Development (OECD) raised Wednesday Turkey’s growth forecast for the year to 3.4 percent, up from 3.3 percent, on the back of government measures.
“Economic activity slowed in 2016 against the backdrop of a failed putsch in July and increased geopolitical tensions in the region,” the organization said in its economic outlook for June 2017.
“However, helped by numerous government measures, both private consumption and investment have started to recover,” it added.
The upgrade came after the World Bank edged up the country’s growth rate to 3.5 percent from 3 percent for 2017.
These latest growth figures are lower than the 4.4 percent forecast by the Turkish government.
The Paris-based organization estimated Turkey’s growth rate to stand at 3.5 percent in 2018, down from 3.8 percent.
“Given continuing regional geo-political tensions, and prior to general elections in 2019, growth is projected to edge up to around 3.5 percent in 2017 and 2018,” the report read. “Growth was helped by acceleration in exports thanks to improved demand from Europe and competitiveness gains delivered by exchange rate depreciation.”
“If economic reforms are implemented, confidence could improve and growth could be stronger,” the OECD said.
It also said that country’s jobless rate in 2017 would increase to 10.8 percent from 10.7 percent in its previous forecast in January.
The organization also said the inflation rate will climb to 10.4 percent in 2017 up from 7.7 percent, then drop to 8.1 percent in 2018.