Turkiye's growth projected to slow from 4% in 2023 to 3.25% in 2024

The current account deficit is projected to narrow to about 3 per cent of the gross domestic product (GDP) in 2024, IMF said.

Sequential inflation should also fall next year and is projected to reach 46 per cent year on year (YoY) by December 2024 from 69 per cent in end-2023, it said in a release.

IMF urged Turkish authorities to build on the current momentum by prioritising disinflation by bringing the ex-ante real policy rate into contractionary territory, continuing to liberalise financial regulations to improve the functioning of money and credit markets, and containing the fiscal deficit.

“The balance of risks is to the downside. On the domestic front, the key risk is that the policy shift now underway loses its strong momentum, eroding confidence and leading to increased FX [foreign exchange] demand and reserve drain. Externally, the key downside risks are higher commodity prices, a slowdown in trading partners’ demand, and global systemic financial instability," IMF’s James P Walsh said in the release.

“On the upside, unexpected sources of external financing could materialise, or, should investor confidence recover fully, a virtuous cycle of inflows and a stronger exchange rate could bring down inflation faster than expected, while boosting growth,” he added.

Fibre2Fashion News Desk (DS)