Turkiye's GDP growth forecast updated to 3.5% for 2023: EBRD

The upward revision in Turkiye's GDP growth forecast for 2023 has been influenced by the strong economic performance in the first half of the year. This growth has primarily been driven by pre-election fiscal stimulus, although EBRD expects the momentum to slow down in the latter half of the year, as per the bank’s Regional Economic Prospects Report.

The bank also anticipates Turkiye's economy to grow by 3 per cent in 2024. It notes that the upcoming local elections in March 2024 will be a significant factor for the country's economic outlook as the elections draw closer. A return to orthodox economic policies has been cited as a positive development in the report.

Despite the encouraging forecast, the EBRD report calls attention to the persisting external imbalances in Turkiye's economy. It highlights that the country’s short-term external debt has now exceeded $200 billion, with the current account deficit standing at an alarming $60 billion. Although foreign exchange reserves are on the rise, they still remain modest, the report noted.

Turkiye has experienced a relatively strong economic growth rate in the past few years. However, the economy has witnessed a slowdown recently, with GDP growth decelerating from 5.6 per cent in 2022 to 3.9 per cent year on year in the first half of 2023. The report also underscores the issue of persistent, elevated inflation rates. Inflation has decreased somewhat but remains high, and it is expected to rise to a staggering 60 per cent by the end of 2023.

Fibre2Fashion News Desk (DP)