EBRD forecasts moderate growth for Turkey

ISTANBUL

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The European Bank for Reconstruction and Development (EBRD) has projected Turkish growth at around 3.2 percent this year, down from 4 percent in 2015. 

The Turkish economy will grow 3.4 percent in 2017, the EBRD predicts.

According to the EBRD’s latest Regional Economic Prospects report, low oil prices and a 30 percent hike in the minimum wage will support growth this year.

“The outlook, however, is hindered by falling tourism revenues in the wake of recent terror attacks, Russian sanctions, and continuing tensions in the Middle East. At the same time, the lifting of sanctions on Iran might slightly benefit exports,” the bank said in a statement. 

“Consumption, a factor supporting 4 percent growth in 2015, may moderate somewhat, as some of the one-off factors boosting it last year fade away,” it added. 

“Those factors included lower oil prices and higher spending from an increased flow of refugees into the country. Consumption was also supported by frontloading of durable goods, such as cars, in expectation of higher prices of imported goods following currency weakening, and somewhat stronger government transfers during a period of elections and in response to the refugee influx,” the EBRD said.