Fitch expects more near-term growth for Turkey
LONDON - Anadolu AgencyYear-end growth estimations for Turkey have been upgraded to 3.5 percent from 3 percent in December last year due to a better-than-expected economic performance, according to a chief economist at Fitch ratings agency.
Turkey received the largest upgrade in its growth outlook among emerging economies such as India, China and South Africa, while all others received cuts to their 2016 growth forecasts.
Speaking to Anadolu Agency, Fitch Ratings Chief Economist Brian Coulton said incoming data for 2015 indicated upward economic momentum in the country.
Coulton highlighted the country’s macroeconomic policy and strength in consumer spending.
“Incoming data for 2015 indicates more near-term economic momentum,” Coulton said.
According to the chief economist, consumer spending was to be main growth contributor for the year, driven by a 30 percent hike in the minimum wage, lower oil prices and a fairly loose macro policy stance.
Fitch had affirmed Turkey’s long-term foreign and local currency issuer ratings at “BBB-” and “BBB,” respectively, with a stable outlook.
The agency said the country’s strong fiscal position, declining oil prices and falling current account deficit were the main drivers behind Turkey’s success in preserving its investment grade rating.
Fitch forecasts Turkey to grow by 3.6 percent in the next year, Coulton noted.
Among the larger emerging-market economies, India, Poland, Turkey and South Korea are all large net commodity importers and stand to benefit in real income terms from the fall in commodity prices, according to Fitch Ratings’ Global Economic Outlook Report released on March 7.
The report said the impact of Russian sanctions on Turkey would be gradually offset by deeper economic relations with Iran and a modest strengthening of the eurozone.
However, the agency warned ongoing conflict and oil price-related stresses in neighboring trading partners will hamper Turkey’s net trade.