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Turkey economic growth, inflation to miss government targets

Turkey economic growth, inflation to miss government targets

ISTANBUL: Turkey will miss official economic growth forecasts for this year and through 2019, according to private sector economists in a Reuters poll who were nonetheless a bit more upbeat than they were just three months ago. Under its medium-term programme, which is updated annually, the government sees economic growth at 5.5 percent between 2018 and 2020. The programme forecasts inflation to fall to 7 percent next year, while all analysts polled by Reuters predicted a higher inflation figure in 2018. “Credit guarantee fund-backed loan acceleration supported growth by around 2 points this year. I don’t think that this stimulant will be around next year. At least, it will have a negative effect on 2018 growth,” said Haluk Burumcekci, an economist who runs Burumcekci Consulting in Istanbul. Growth in 2017 is estimated at 5.0 percent, according to the poll of 42 economists, below the government’s official forecast of 5.5 percent, but well above the previous Reuters poll in July which predicted 3.9 percent.

For 2018, growth is seen at 3.5 percent, the poll showed. A widespread crackdown following last year’s coup attempt, in which some 150,000 people have been sacked or suspended from jobs in the civil service and private sector and more than 50,000 have been detained, continues as well as the state of emergency in the country, affecting the economy. After hitting a 8-1/2-year high just below 12 percent in April, Turkish inflation cooled in the following months on a drop in food prices. But it returned to an upward trend in August and September, climbing to double digits. The Reuters poll predicted inflation would remain high, at 9.8 percent by end-year and 8.4 percent at end-2018, above the government’s target of 9.5 percent and 7.0 percent respectively.