OECD revises Turkish GDP growth forecasts

OECD revises Turkish GDP growth forecasts

PARIS
OECD revises Turkish GDP growth forecasts

The Organization for Economic Co-operation and Development (OECD) has revised its growth forecasts for the Turkish economy for this year and 2020.

In its Interim Economic Outlook report, released on March 6, the organization said it expects Turkey’s economy to contract by 1.8 percent in 2018 versus the 0.4 percent decline in GDP the OECD predicted in November.

The OECD, however, lifted its GDP growth estimate to 3.2 percent for 2020 from the previous forecast of 2.7 percent.

The government’s growth targets for 2019 and 2020 are 2.3 percent and 3.5 percent, respectively.

“Growth prospects remain weak in Turkey,” the OECD said in the interim version of the outlook report.

“Output and domestic demand have declined sharply since mid-2018, following severe financial market pressures and tighter macroeconomic policies.”

“Financial markets have stabilized and external competitiveness has improved, but weak confidence, high corporate debt service burdens, tight monetary policy and soft demand in euro area markets still weigh on domestic and external demand,” it added.

The organization also argued that a tighter policy stance remains necessary in those emerging-market economies, such as Argentina and Turkey, where concerns persist about the sustainability of fiscal or external positions, in order to retain investors’ confidence.

On March 6, Turkey’s Central Bank kept its one-week repo rate - also known as the policy rate - constant at 24 percent.

 “The Monetary Policy Committee has decided to maintain the tight monetary policy stance until inflation outlook displays a significant improvement,” the bank said, adding that further monetary tightening will be delivered, if needed.

OECD, Turkish economy, economic growth, 2019