World Bank cuts Turkey's growth forecast for 2016

Bank revises growth forecast for 2016 to 3.1 percent from 3.5 percent in July

World Bank cuts Turkey's growth forecast for 2016

World Bulletin / News Desk

The World Bank has revised its growth forecast for Turkey in 2016 to 3.1 percent from 3.5 percent after last year’s growth of 4.2 percent, the bank said in its economic report on Friday.

The bank kept the country's growth forecast unchanged at 3.5 next year, but cut its July forecast for Turkey's economic expansion in 2018 by 0.1 percentage to 3.5 percent.

"We project GDP [Gross Domestic Product] growth to rebound to 3.5 percent in 2017, thanks to improving net exports due in large part to the removal of Russian sanctions," the report said.

The Turkish government's most recent growth forecast for 2016 was 3.2 percent, as stated in its medium-term economic program released on Oct. 4.

The report said the slower GDP growth in the second quarter of the year led to revising down growth forecast to 3.1 percent for 2016.

"We are revising down our growth projection for 2016 from 3.5 percent to 3.1 percent because private investment and consumption appear to have slowed down in the aftermath of the failed coup attempt," the note said.

The bank said the country's current account deficit was likely to rise in 2016 as tourism revenues fall.

"The rise in global oil prices and negative net exports are expected to bring the current account deficit to 5 percent of national income [GDP] in 2017," the report said.

The bank also warned about the weak Turkish lira. "The depreciation of the lira put additional strain on the balance sheets of corporates, which have large open forex [foreign exchange] position, weighing confidence and investment outlook," it said.

Last Mod: 25 Kasım 2016, 17:30
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