OECD lifts growth forecasts for Turkey

OECD lifts growth forecasts for Turkey

OECD lifts growth forecasts for Turkey

The Organisation for Economic Co-operation and Development (OECD) has revised its gross domestic product (GDP) predictions for the Turkish economy for this year, next year and 2021.

In the latest issue of its Economic Outlook report released yesterday, the Paris-based organization changed its 2019 forecast for Turkey to a 0.3 percent growth from a contraction of 0.3 percent in the September projections.

The OECD also revised upwards the GDP growth forecast for 2020 to 3 percent from 1.6 percent while lifting its forecast for 2021 to an expansion of 3.2 percent from a previous 2.3 percent.

“Growth has continued to pick up over recent months. Substantial government stimulus is lifting domestic demand more vigorously than previously anticipated and currency depreciation is supporting exports,” it said.

Yet, weak external trade demand, geopolitical uncertainties and impaired private balance sheets are projected to keep GDP growth at around 3 percent, well below potential growth, the organization added.

The OECD expects private consumption to increase by 4 percent next year, after contracting 0.6 percent in 2019. The growth in private consumption will ease slightly to 3.8 percent in 2021, according to the organization.

It also projects that the country’s exports will grow 5.2 percent this year.

The OECD forecasts that Turkey’s current account surplus will amount to 0.3 percent of the expected GDP this year, however, the current account balance will post a deficit in 2020 (0.7 percent of GDP) and 2021 (1.3 percent of GDP).

The Paris-based organization’s consumer price inflation projections for this and the next two years are 15.8 percent, 13.2 percent and 10 percent, respectively.