European bank revises Turkey’s growth outlook

The European Bank for Reconstruction and Development, or EBRD, which has been withdrawing gradually from Central European countries, plans to prioritize Turkey.

EBRD is the first international finance corporation, among many others, to revise Turkey’s economic growth in a positive direction.

The bank had published a report estimating Turkey’s 2010 growth to be 1 percent. The bank has revised that outlook to 3 percent.

The economies of eastern and southern Europe including Turkey, will experience an economic contraction this year, however, signs of recovery will begin next year, said the EBRD.

Turkey’s economy will contract nearly 6 percent in 2009, however that contraction rate is still well above contraction expected in other countries in the region.

According to the EBRD, while southeastern European countries are experiencing a recession of 6.2 percent this year, the mean contraction will be 8.7 percent for eastern European countries.

Turkey will have the fastest growing economy in its region in 2010, said EBRD, with the average economic growth expected from the region is 0.7 percent. Turkey’s economic growth for that period was revised to 3 percent growth, which marks four-fold growth over the average.

Turkey’s robust banking industry will play a major role in the fast recovery, according to EBRD. The increase in the European Union’s demand and foreign trade with those countries will be a major motivator of 2010 recovery, according to the bank. Other factors will include increasing demand from EU member countries and increasing foreign trade figures. Meanwhile, unemployment will continue to be the top concern for Turkey and other countries in its region.

The EBRD also revealed plans to prioritize Turkey in regards to investments, with specific support aimed at the banking industry, the tourism sector, small- and medium-sized enterprises, media, infrastructure investments, energy, real estate, health, information technologies, agriculture and food.