Several indicators, including PMI, industrial output, capacity utilisation and confidence indexes suggest that growth momentum has continued into the first quarter of the year, Treasury Undersecretary Ibrahim Canakci said on Wednesday.
Deputy PM Ali Babacan also sounded optimistic on growth, saying that the government’s GDP growth forecast of 4% for 2014 is still realistic. The government will monitor developments to see if there is need to revise the growth forecast, Babacan said, adding that there are some downside risks to growth. The Turkish economy expanded 4% last year. OECD this week cuts its GDP growth forecast for Turkey for 2014 to 2.8% from a previous 3.8% and it slashed the 2015 forecast to 4% from a previous 4.1%. The IMF expects the Turkish economy to growth 2.3% this year, down from the Fund’s previous estimate of 3.5%.
Going back to the Treasury Undersecretary comments, Canakci also said that higher interest rates and depreciation of TRY would not have a significant impact on debt servicing. The domestic debt rollover ratio is expected to stay slightly below the Treasury’s target, Canakci added. The Treasury targets TRY 134.6bn (EUR 46.45bn) domestic and TRY 14.8bn external borrowing this year and its debt rollover ratio target is 86%.
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