The Turkish economy is expected to grow by 3.4% this year, the IMF said in a note prepared by its staff for February 9-10 G-20 finance ministers and central bank governors meeting in Istanbul. In its October 2014 World Economic Outlook Report, the Fund had forecast a 3% GDP growth for Turkey. The Fund, however, slashed its 2016 GDP growth forecast to 3.4% from a previous 3.7%. 

Some economies, such as Turkey, that rely heavily on private external financing will need to proactively further adjust policies, said the Fund in the note, adding that some economies (Brazil, India, South Africa, Turkey) need to maintain the course of fiscal consolidation, given large fiscal deficits and high inflation in some cases, and high external borrowing that has increased exposure to external funding risks in others.

Earlier this week, the European Commission (EC) also revised its forecasts for the Turkish economy. The EC raised its forecast to 3.4% from a previous 3.3% for 2015 and from 3.7% to 4% for 2016.

The Turkish government expects a 4% GDP growth this year and a higher growth rate of 5% next year. While acknowledging potential risks from Europe, Deputy PM Ali Babacan said in January that the government would not revise its GDP growth forecast for 2015.