The World Bank revised down its global and regional economic growth projections for 2017, including that of Turkey, in its Global Economic Prospects report published on Jan. 10.
Turkey’s growth expectation for 2017 was revised down to 3 percent, from 3.5 percent, following last summer’s failed coup attempt and deteriorating business conditions.
“Downside risks to the outlook increased compared to June, reflecting political uncertainty and financial market volatility,” the report said regarding Turkey.
“If geopolitical and domestic political tensions delay the implementation of necessary reforms and discourage investment, long-term growth prospects would also be adversely affected,” the bank warned.
The report also stressed that Turkey needs to narrow its current account deficit by reducing its energy imports through higher investments in this sector.
“Annual energy investments of $12 billion are required to meet the country’s development goals, to diversify the sector ... Turkey plans to increase renewable sources of energy, including nuclear, and improve energy efficiency. From 2014 to 2018, total infrastructure investment needs are estimated at $350 billion,” it added.
The bank said it expects global growth to be 2.7 percent in 2017 from the previous year. This projection, however, is lower than its previous estimate on June 2016, which was 2.8 percent.
“Stalling global trade, weak investment, and heightened policy uncertainty have depressed world economic activity,” the report said.
The bank also anticipates emerging countries to grow by an average of 4.2 percent this year, which is lower than its previous projection of 4.4 percent.
Economies in advanced countries are anticipated to grow by an average of 1.8 percent in 2017, which was previously projected at 1.9 percent in June.
“Advanced economies continue to struggle with subdued growth and low inflation,” the report noted.
The U.S.’s growth projection for this year was kept unchanged at 2.2 percent, but the bank stated that President-elect Donald Trump’s proposed policies could drive this higher.
“The large reductions in corporate and personal income taxes suggested by the new administration could ... increase both U.S. GDP growth and global growth,” it said.