IMF predicts 3 pct growth this year

WASHINGTON - Anatolia News Agency

IMF Managing Director Christine Lagarde is seen in this file photo. EPA photo

Turkey’s economy will grow 3 percent this year and 3.5 percent next year, the International Monetary Fund (IMF) has predicted in its latest review.

The IMF also expects inflation to fall to 6.2 percent next year from an estimated rate of 7.5 percent this year.

The ratio of the current account deficit - a soft spot of the Turkish economy - to gross domestic product will be 7.5 percent this year and will drop to 7.2 percent in 2013, according to the IMF estimates.

After growing well above global trends in 2010 and 2011, the Turkish economy has slowed to a more sustainable 3 percent growth rate this year, the fund said yesterday in a written statement.

Growth has also become more balanced, as domestic demand and imports decelerated on the back of tighter monetary and macro-prudential policies implemented in 2011. Exports continue to perform well thanks to successful diversification toward new markets, according to the report. The current account deficit has recently shrunk significantly, by 33 percent year-on-year in the 12 months to August.
Inflation, both headline and core, is also coming down from its peak in early 2012.

The Executive Directors of IMF commended the Turkish authorities for setting the stage for more sustainable and balanced growth in 2012, accompanied by declines in the current account deficit and inflation.

They noted that the outlook was clouded by external uncertainties, and that Turkey remains vulnerable to shifts in market sentiment, given the country’s still large external financing needs.