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POLL-Turkish economic growth to fall short of gov't forecast


Reuters

* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TRGDPAP
 poll data

    ANKARA, July 18 (Reuters) - Turkey's economic growth this
year will fall slightly short of the government's forecast, a
Reuters poll found, suggesting not all investor concerns
following an April referendum giving President Tayyip Erdogan
sweeping new powers have eased.
    While growth forecasts are better than they were three
months ago - alongside a rising stock market and a more stable
lira - projected growth rates are still well below half the
expected inflation rate, suggesting not all is well.
    On April 16, Turks voted by a thin margin to back
constitutional changes to create an executive presidential
system, in which Erdogan, the most popular but divisive leader
in recent Turkish politics, could remain in power until at least
2029.
    The government has said the changes would boost growth as
they will make it easier to push through reforms to labour and
tax laws, but investors have voiced concern about Erdogan's
further consolidation of power and his grip on monetary policy.
    "I think the drivers of growth - including rapid credit
growth, loose fiscal policy and a rebound in the tourism sector
- are unlikely to last too long," said William Jackson of
London-based consultancy Capital Economics.
    "I suspect that GDP growth will probably peak in Q3, then
slow sharply," Jackson added.
    Growth in 2017 is estimated at 3.9 percent, according to the
poll of 41 economists, slightly below the government's official
forecast of 4.4 percent, but well above the previous Reuters
poll in April which predicted 2.6 percent.
    For 2018, growth is seen at 3.3 percent, the poll showed.
    Widespread purges since last July's coup attempt, in which
some 150,000 people have been sacked or suspended from jobs in
the civil service and private sector and more than 50,000 have
been detained, have also alarmed rights groups and Turkey's
Western allies.
    In the aftermath of the abortive putsch, the lira hit a
series of record lows, and the economy saw a 1.3 percent
contraction, with concerns about the political situation also
pushing up consumer prices. Both the lira and inflation have
since shown signs of recovery.
    After hitting a 8 1/2-year high just below 12 percent in
April, Turkish inflation cooled in May and June, on a drop in
food prices to a little under 11 percent increase in annual
consumer prices.[nL8N1JU169]
    The Reuters poll predicted inflation would remain high at 10
percent by end-year, not far below the current level. The lira
has firmed somewhat from a record low of 3.94 against the U.S.
dollar in January.

    (For other stories from the Reuters global long-term
economic outlook polls package [nL4N1K33NG])

 (Reporting and polling by Vartika Sahu and Sujith Pai; Writing
by Tuvan Gumrukcu and Ece Toksabay; Editing by Richard
Balmforth)
 ((tuvan.gumrukcu@tr.com; +903122927021; Reuters Messaging:
tuvan.gumrukcu.thomsonreuters.com@reuters.net))

Keywords: TURKEY ECONOMY/POLL (EMBARGO JULY 18, 0645 GMT)



This article appears in: Stocks , World Markets , Politics


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