EBRD warns Turkey about slow growth

ISTANBUL- Hürriyet Daily News

The EBRD, governed by Thomas Mirow, is pessimistic on 2012 growth in Eastern European countries. Hürriyet photo

The European Bank for Reconstruction and Development (EBRD) warned several countries, including Turkey, Hungary, Kazakhstan and Russia, could post growth lower than the bank’s latest quarterly forecast if the eurozone crisis worsens.

The Turkish economy is expected to be adversely affected by the lingering eurozone crisis, said EBRD, adding that it predicted the Turkish economy, which expanded 8 percent last year, will grow only 2.5 percent this year.

The slowdown in the Turkish economy may stem from the decreasing foreign capital inflows and demand, the bank said.

London-based EBRD also trimmed its growth forecast for the countries across the ex-Soviet block where it operates, to 3.1 percent this year due to the ongoing crisis.

“In line with our October forecast, growth in the EBRD region will substantially slow from about 4.8 percent in 2011 to 3.1 percent in 2012 assuming that the eurozone sovereign debt crisis does not
materially deteriorate further,” the EBRD statement said.

“The projected regional slowdown in 2012 is largely due to significantly weaker growth in central and southeastern Europe, which is particularly exposed to eurozone stress, and where a few countries are expected to return to recession this year,” the bank said. “Russia and other commonwealth of independent states, much less integrated with Western Europe, “are likely to continue to enjoy respectable growth rates assuming commodity prices remain high,” it said.