The Turkish economy is likely to have expanded 3.8% last year, PM Recep Tayyip Erdogan said on Tuesday.
Q4/2013 data is not available yet, but he believes the economy grew at a rate of 3.8% in 2013, making Turkey one of the five fastest growing countries in the Organisation for Economic Cooperation and Development (OECD), Erdogan said. The government’s medium-term programme had predicted a GDP growth rate of 3.6% for 2013.
The government forecasts a GDP growth rate of 4% for this year which analysts think too optimistic given the turmoil in emerging markets and measures taken by the authorities to curb domestic demand. A Central Bank’s regular survey found out last month that the Turkish economy is expected to grow 3.2% this year, lower than the 3.7% growth estimate in the previous survey.
The Central Bank aggressively raised interest rates in an attempt to halt the depreciation of TRY but it did not help. The on-going political turmoil also puts additional pressure on TRY.
Last month, the EBRD cut the 2014 GDP growth forecast for Turkey to 3.3% from a previous 3.6%, citing monetary tightening and an increase in financing costs linked to higher political risks. The World Bank and IMF both expect the Turkish economy to expand 3.5% this year.
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