IMF revises up growth forecast for Turkey as it cuts global outlook
AFP photoThe International Monetary Fund has revised up its growth forecast for Turkey in 2016 from 3.2 percent to 3.8 percent, although it downgraded its forecast for world economic growth, citing unexpected weakness in the U.S. and Japan as well as the expected “severe” damages that would be the result of Britain’s possible exit from the European Union.
“In Turkey, growth is projected to remain stable at 3.8 percent in 2016, with a large minimum wage increase sustaining domestic demand in the face of geopolitical uncertainty, weak external demand, and slowing credit growth,” it said in its latest forecast on April 12.
The IMF, however, slashed its 2017 estimate from 3.6 to 3.4 for Turkey.
It also expected a global growth of 3.2 percent this year, down from the 3.4 percent it predicted in January.
Even the scaled-back forecast would mark an improvement over last year’s 3.1 percent growth, the slowest pace since the recession year 2009.
It added that intensifying financial and political risks around the world, from volatile financial markets to the Syria conflict to global warming, had left the economy “increasingly fragile” and vulnerable to a turn toward recession. It also said it was concerned over “fraying” unity in the European Union under pressure from the migration crisis and a “Brexit” possibility.
The agency cut its 2016 forecast for the U.S. to 2.4 percent from 2.6 percent; Japan to 0.5 percent from 1 percent; the 19-country eurozone to 1.5 percent from 1.7 percent.
Noting strong consumer spending and growth in services, the IMF boosted its growth forecast for China to 6.5 percent from 6.3 percent. And the IMF saw the global slowdown continuing into 2017, when China is expected to grow at a 5.2 percent pace.