World Bank revises Turkey growth forecast upwards

ISTANBUL

The World Bank has raised its growth projection for the Turkish economy by 0.5 percentage points to 5 percent for 2021.

“In Turkey, following three years of subdued growth amid recurring financial market pressures and the COVID-19 crisis, growth is projected to rise to 5 percent in 2021, as exports benefit from firming external demand, particularly in the euro area,” the bank said in its latest Global Economic Prospects report on June 8.

“The expansion is then set to moderate to 4.5 percent in 2022, with activity supported by a gradual pick up in domestic demand,” it said.

The forecast masks growing vulnerabilities, read the report, adding: “Economy’s vulnerabilities include reoccurring COVID-19 outbreaks and a slowdown in vaccination progress, weak international tourism, sharp tightening of external financing conditions, and a recent rise in policy uncertainty, especially about monetary policy.”

The World Bank also increased its global economic growth forecast to 5.6 percent for this year, up 1.5 percentage points from its previous forecast.

The bank forecast the global economy will grow by 4.3 percent next year and 3.1 percent in 2023.​​​​​

As the global economy contracted 3.5 percent in 2020 due to the pandemic, the world is expected to see the strongest post-recession pace in 80 years, said the bank.

“The recovery is underpinned by steady but highly uneven global vaccination and the associated gradual relaxation of pandemic-control measures in many countries, as well as rising confidence,” it said.

The rebound will mainly come from major economies such as the United States (6.8 percent) and China (8.5 percent).

The GDP in the eurozone is expected to increase by 4.2 percent this year, the bank said.