EBRD cuts 2014 economic growth forecast for Turkey to 3.3%.

By bne IntelliNews January 21, 2014

The EBRD has cut its 2014 GDP growth forecast for Turkey to 3.3% from a previous 3.6%. The EBRD has kept the 2013 GDP growth forecast unchanged at 3.7%.

Growth in Turkey is likely to moderate somewhat to 3.3% in 2014, from 3.7%, reflecting monetary tightening and an increase in financing costs linked to higher political risks which are pulling growth back, says EBRD’s latest Regional Economics Prospects report.

Nevertheless, domestic demand is still expected to grow, albeit at a slower pace, and net exports may benefit from a recent depreciation of the currency, according to the Report, which also underlines that still high current account deficit leaves the economy vulnerable to further shifts in global market sentiment.

Recent elevated political uncertainty coupled with the Fed’s decision to begin tapering off its quantitative easing programme in December, has renewed pressure on the currency and increased the risk premium facing the country, the Report notes.

Average annual inflation -7.4% in 2013- is expected to remain elevated above the target in 2014 at 7.3%, driven by the recent tax hikes and currency depreciation passing through to inflation, and less favourable base effects of food and energy prices, the Report says.

Another downward risk to the outlook stems from a continuation of political uncertainty at the high levels seen recently throughout the long election cycle over the next year but a quick political stabilisation would help consolidate financial condition and confidence and boost domestic demand, according to the Report.

GDP Growth Projections for Turkey    
(%) 2013 2014
EBRD 3.7 3.3
European Commission 3.5 3.0
Turkish Government 3.6 4.0
IMF 3.8 3.5
Turkish Central Bank survey 3.7 3.9
World Bank 4.3 3.5
OECD 3.6 3.8
Source: ebrd, ec, dpt, imf, tcmb    

Related Articles

Turkish cargo plane crashes near Kyrgyz capital, killing at least 37

A Turkish cargo plane flying from Hong Kong crashed on January 16 near Kyrgyzstan’s capital Bishkek, killing at least 37. Operated by ACT Airlines, the ... more

Turkish lira’s free fall continues as economic and political worries weigh on sentiment

The collapse in the value of the Turkish lira accelerated on January 9 with the currency tumbling 2.3% against the dollar and finishing at an all-time low against the greenback by the end of the ... more

EU wants to deepen trade relations with Turkey

The European Commission has asked the European Council for a mandate to launch talks to update the bloc's 20-year-old customs union with Turkey, the EU's executive said on December 21. The ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss