Turkish economy minister sees Q1 GDP growth at 1.5%

By bne IntelliNews May 6, 2015

Economic growth will be around 1.5% in the first quarter and above this figure in the second, economy minister Nihat Zeybekci told Reuters in an interview on May 6, adding that the government’s 4% growth target for 2015 is still attainable.

GDP growth accelerated to 2.9% in Q4/2014 from 1.9% in the third quarter, but in the whole of 2014 the economic growth slowed to 2.9% from 4.2% in 2013.

The European Commission this week cut its 2015 growth forecast for the Turkish economy to 3.2% from a previous 3.5% and it slashed the 2016 GDP growth forecast to 3.7% from a previous 4%.

Zeybekci also said in the interview that he saw no reason for the central bank to hike interest rates in the current environment. Earlier this week, the minister said he expected the central bank to leave its key interest rates unchanged at this month’s monetary policy committee (MPC) meeting.

In the interview, Zeybekci argued that food inflation of around 14% was due to speculators and it would fall. The government would take measures including the possible derestriction of imports on certain food products, said the minister. Last week, the central bank raised its inflation forecast for 2015 to 6.8% from a previous 5.5%, citing a weak lira and high oil prices. The bank also lifted its 2016 inflation forecast to 5.5% from a previous 5%. Prices of some food items are sensitive to the exchange rate and there are uncertainties over supply-side developments which necessitate caution against food inflation, warned the central bank recently.

Zeybekci also told Reuters that he expected Standard & Poor’s to keep its rating on Turkey unchanged at a review on Friday, but predicted that agencies would upgrade their ratings on Turkey after June general election.

GDP Growth Projections for Turkey gdp
(%) 2015
EBRD (Sep 2014) 3.0
European Commission (May 2015) 3.2
Turkish Government - Medium Term Programme for 2015-2017 (Oct 2014) 4.0
IMF (April 2015) 3.1
Turkish Central Bank survey (April 2015) 3.1
World Bank (Apr 2015) 3.0
OECD (Nov 2014) 3.2
Fitch (Dec 2014) 3.3
S&P (Mar 2015) 3.0
Intesa Sanpaolo S.p.A. 3.5
Akbank 3.5 - 4.0
Source: ebrd, ec, dpt, imf, tcmb, oecd, world bank, s&p, kap  

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