IMF: Bearish on world economy, bullish for Turkey

By Gokhan Ergocun

ISTANBUL (AA) - The International Monetary Fund has lowered its expectation for the world economy this year from 3.2% to 3%, but upped its forecast for Turkey.

The fund also revised the forecast for the world economy to 3.4% for 2020, down from 3.5% in the previous report in July, it announced on Tuesday.

The IMF's expectation for advanced economies fell 0.2 percentage points to 1.7% for 2019, while staying the same for 2020, 1.7%.

The report's predictions for the EU dropped from 1.6% to 1.2% for 2019 and from 1.8% to 1.4% for 2020.

The forecast for emerging markets and developing economies also fell to 3.9% and 4.6% for the same years, down by 0.2 and 0.1 percentage points.

Meanwhile, the fund raised its expectation for the Turkish economy from negative 2.5% to positive 0.2% for 2019 and from 2.5% to 3% for 2020.

"Growth recovered in Turkey in the first half of the year following a deep contraction in the second half of 2018, benefiting from more favorable global financial conditions and fiscal and credit support," it said.

The IMF's expectations for 2019 and 2020 for the Turkish economy for inflation were 15.7% and 12.6%, for the current account deficit were -0.6% and -0.9%, and for unemployment were 13.8% and 13.7% .

Turkey's New Economic Program, released at the end of September, targets 5% GDP growth for the next three years, while its inflation targets were 8.5% in 2020, 6% in 2021, and 4.9% in 2022.

The Turkish economy grew 2.6% last year and 7.4% in 2017.

The report also predicted lower growth in the volume of worldwide trade by 1.4 and 0.5 percentage points to 1.1% and 3.2% for 2019 and 2020.