IMF: Strong rebound prompts upward revision for Turkey

By Gulbin Yildirim

WASHINGTON (AA) - The Turkish economy's strong rebound that began late last year is "the main reason for the upward revision" in country's growth forecasts, a top official at the IMF said Tuesday.

The "economy has already achieved pretty high growth for 2017 just with the level of output that it has reached at the end of the second quarter," according to deputy research director Gian Maria Milesi-Ferreti who spoke during a news conference in Washington that unveiled the bank’s flagship World Economic Outlook report.

In the report published ahead of the annual IMF - World Bank meetings, Fund economists forecast Turkey’s economy to grow by 5.1 percent in 2017, up 2.6 percentage points compared to a previous forecast of 2.5 percent.

Growth in Turkey is predicted to speed up to 3.5 percent from 3.3 percent in 2018.

The forecasts are remarkable given regional instability, including Turkey's commitment to eradicate terror groups domestically and beyond its own borders, and Ankara’s resilience following a failed deadly putsch in July 2016.

Turkey’s economy grew 5.2 percent in the first quarter of 2017 and 5.1 percent in the second quarter, compared to the same periods in 2016, according to the Turkish Statistical Institute (TurkStat).

"Turkey has been helped by the overall decline in oil prices as a big importer and a very benign market environment" Milesi-Ferreti said.

But despite the rosy outlook, Milesi-Ferreti cautioned the Turkish economy faces vulnerabilities that could cause strains in a more difficult market environment.

"It has a wide current account deficit and an inflation rate that remains uncomfortably far from the target. So, at some point policies have to address these imbalances" he said.