The European Union has increased its 2017 growth forecast for Turkey by more than two percentage points, according to the European Economic Forecast Autumn report
Brussels’ latest set of economic forecasts project that the Turkish economy will grow 5.3 percent in 2017, up from the union’s previous estimate of 3 percent in May. The EU raised the country’s economic growth forecast for 2018 from 3.3 percent to 4 percent. The Turkish economy is also expected to grow 4.1 percent in 2019.
The increase follows the International Monetary Fund’s raising of Turkey’s 2017 growth forecast by 2.6 percentage points on Oct. 10, the World Bank raising its forecast 0.4 percentage points on Oct. 19, and the European Bank for Reconstruction and Development’s (EBRD) lifting of it by 2.6 percentage points on Nov. 7.
Turkey’s economy grew 5.2 percent in the first quarter of this year and 5.1 percent in the second quarter, compared with the same periods in 2016, according to the Turkish Statistical Institute (TÜİK). “The government’s fiscal stimulus this year – supported by stronger exports, a significantly depreciated Turkish Lira in comparison with last year, and a strong boost from public finances and other policy incentives – intended to restore confidence in the Turkish economy,” the bloc’s economic report stated.
The report noted that the growth of private consumption was expected to increase towards the end of this year and continue its expansion in 2018-19. The EU sharply raised its eurozone growth forecast for 2017 as well, confident that the economic recovery was gathering pace despite the uncertainties of Brexit.
The 19-country eurozone will grow by 2.2 percent in 2017, its fastest pace in a decade, the European Commission said, AFP reported. This was substantially higher than the previous forecast of 1.7 percent and comes just after the EU’s latest GDP growth figures resoundingly beat expectations.
The Commission said dark clouds that did exist included the outcome of Brexit talks between the EU and Britain, as well as geopolitical tensions between the U.S. and North Korea. Britain saw its outlook for 2017 slashed due to “uncertainty” over Brexit.
“After five years of moderate recovery, European growth has now accelerated,” EU Economy Commissioner Pierre Moscovici said. “We see good news on many fronts, with more jobs being created, rising investment and strengthening public finances,” Moscovici added.
In its forecasts, the European Commission said growth in 2018 would edge lower to a still strong 2.1 percent, followed by 1.9 percent in 2019.