World Bank revises Turkish economic growth to 4.3 pct

ISTANBUL

The World Bank has revised Turkey’s current account deficit to widen it to $61.1 billion this year from an earlier forecast of $57.2 billion. DAILY NEWS photo, Emrah GÜREL

The World Bank upwardly revised its forecast for Turkish economic growth this year to 4.3 percent from a previous 3.6 percent yesterday, but cut its outlook for 2014 to 3.5 percent from 4.5 percent.

The country director for Turkey of the World Bank, Martin Raiser, and World Bank economist Çağdaş Ünal said in a news conference in Ankara that that inflation this year was seen at 7.5 percent, and revised the bank’s forecast for 2014 to 6.2 percent, up from 5.2 percent.

The World Bank revised Turkey’s current account deficit to widen it to $61.1 billion this year from an earlier forecast of $57.2 billion. However, the Turkish government reduced in October the growth rate target from 4 percent to 3.6 percent for this year and from 5 percent to 4 percent for 2014, Deputy Prime Minister Ali Babacan announced at a press meeting.

The Turkish Central Bank forecasted in November the inflation to edge up to 6.8 percent at the end of 2013, and 5.3 percent at the end of 2014, at higher levels than its previous forecasts of 6.2 and 5 percent respectively.

Respectable growth

“Regarding the figures, Turkey will grow between 3.5-4 percent, it is a respectable growth rate when compared to other countries in the region,” Raiser said.

Raiser stated that while Turkey had created a 5 million-strong labor force since 2009 and enhanced women’s employment, which were positive developments, it also needed structural reforms in education and energy efficiency. The World Bank gave $1.3 billion loan this year as $800 million of it was for development credit, $300 million of it was given to Turkey’s state-run Ziraat Bank and $201 million of it was given to three state-run banks – Ziraat Bank, Halkbank and Vakıfbank – for energy efficiency projects.

Also, Ünal urged that Turkey should continue structural reforms that would help to reduce the country’s dependence on foreign financing and instability of growth. He pointed out that private investments in Turkey fell in the last consecutive six quarters because of an excessive rise in investments before the 2008-2008 economic crisis, high real interest rates and rising volatility led the private investments to decrease. Ünal said they forecasted that public investments that rose in 2012 and 2013 would fall next year. “If Turkey wants to raise investments sustainably, it should raise the domestic saving rate, develop financing quality and continue reforms to improve the business environment,” he said.

Compiled by Anadolu Agency and Reuters stories by Daily News staff.