OECD slashes 2016 growth forecast for Turkey

PARIS/ISTANBUL

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The Organization for Economic Cooperation and Development (OECD) has slashed its 2016 growth forecast for Turkey to 2.9 percent in its latest outlook, down from 3.9 percent in its previous estimate.
“The Turkish economy continues to face geopolitical headwinds and unsettled political conditions, after having weathered a coup attempt in July and engaged in military operations in Syria,” said the OECD. 

Uncertainties are high but fiscal, prudential and monetary policies are supportive and should spur household consumption from late 2016 onwards, it noted, adding that the economy has so far proven resilient to severe shocks. 

GDP growth is projected to pick up in 2017 and in 2018, driven by recovering household consumption and gradual increases in exports, according to the OECD. 

It forecasts growth of 3.3 percent in 2017, again lower than it had earlier expected, and 3.8 percent in 2018. 

The Paris-based organization was slightly more optimistic about the U.S. outlook, with a forecast for growth next year of 2.3 percent, up from 2.1 percent in its last set of estimates in September.

In its twice-yearly Economic Outlook, the OECD voiced optimism on the global growth outlook as the incoming Donald Trump administration’s planned tax cuts and public spending are expected to fire up the U.S. economy. 

U.S. growth would pick up further in 2018 to reach 3.0 percent, the highest rate since 2005, as the Trump administration cut taxes on business and households and embarked on an infrastructure investment program. 

The OECD estimated that global growth would accelerate from 2.9 percent this year to 3.3 percent in 2017 and reach 3.6 percent in 2018.