Deputy PM confident on growth contrary to IMF

Deputy PM confident on growth contrary to IMF

DAVOS - Hürriyet Daily News
Deputy PM confident on growth contrary to IMF

Turkey’s deputy PM Ali Babacan adjusts his earphones during session at Davos. DAILY NEWS photo, Hasan ALTINIŞIK

Turkey will not revise its forecast of 4 percent growth this year, Deputy Prime Minister Ali Babacan said yesterday in Davos, dismissing the International Monetary Fund (IMF) projections that the economy may barely expand.

“Every institution has a different expectation, different assumption. The IMF is generally more negative while the World Bank is a little more optimistic. No doubt that detailed studies are done for every country, but they [predictions] are based on the assumptions regarding political decisions at the end of the day,” he said in a televised interview on the sidelines of the World Economic Forum, adding that Turkey sees no need to change its growth forecasts.

Both the World Bank and the IMF predict a slight recession in the eurozone for this year, and this could be worse or better depending on the scenarios, he said, according to Anatolia news agency. This year will see the Turkish economy “walking, not running,” Babacan said. “We won’t allow the economy to fall into recession.”

The global environment is uncertain and there are major decisions to be taken in developed nations in the next four or five weeks that could change the outlook completely, Babacan said. About 40 percent of Turkish exports go to Europe.

Turkish economic growth may slow to an average of 0.4 percent this year, from 8.3 percent in 2011, according to the report prepared by IMF staff for a meeting of officials from the Group of 20 developed economies in Mexico City on Jan. 19, according to Reuters. In the fourth quarter of 2012, the economy may contract 0.2 percent, it said.

The projections do not necessarily reflect the views of the IMF executive board, the report said. The economy may expand between 1 percent and 2 percent this year, IMF Deputy Managing Director Zhu Min said yesterday, according to the CNBC e-news channel.

The IMF’s forecasts stress downside risk and Turkey can “comfortably” achieve the government’s goal of 4 percent growth, Turkey’s Central Bank Gov. Erdem Başçı said yesterday in an interview in Davos with Bloomberg HT television.