Fitch cuts growth forecast for Turkey, warns of downside risks
“We have cut our growth forecasts for 2018-2020, and see significant and widespread downside risks,” it added.
The lira fell by more than 40 percent over this year, recently hit by a dispute between Turkey and the United States over a Christian pastor, who is being tried in Turkey.
These rates of economic growth are 0.7 percentage points and 2.4 percentage points lower, respectively, than its assumptions when it downgraded Turkey’s sovereign rating to ‘BB’/Negative on July 13.
“We expect that growth will recover somewhat in 2020, to 3.9 percent, but will remain below the trend rate,” it said, adding that its forecasts were subject to considerable uncertainty.
“Risks to our baseline scenario are primarily to the downside and include policy missteps, heightened financial stress in the private sector, geopolitical tensions and potential capital flight,” the agency noted.
This compares with its July forecasts of 2.9 percent for 2018 and 2.5 percent for both 2019 and 2020.