Turkey’s economy to grow 4.7 pct this year: EU report

By Gokhan Kurtaran

LONDON (AA) – Turkey’s economy will grow by 4.7 percent this year and 4.2 percent next year, according to the EU Commission’s latest forecasts.

Turkey’s economic growth in 2018 is expected to be 4.7 percent and at 4.2 percent in 2019, according to Spring 2018 Economic Forecast by European Commission released on Thursday.

“The strong economic momentum that built up in the first half of last year will run out of steam only slowly. The driver of demand has shifted from strong government stimulus and foreign demand to private consumption,” the report said.

Turkey’s consumer price index is expected to be 10.9 percent in 2018 and 9.0 percent in 2019, while unemployment will be 9.8 percent this year and 9.4 percent next year, it said.

Noting that growth rates for the EU and the euro area beat expectations in 2017 to reach a 10-year high at 2.4 percent, the report said growth is set to remain strong in 2018 and ease only slightly in 2019, with growth of 2.3 percent and 2.0 percent respectively in both the EU and the euro area.

Unemployment continues to fall and is now around pre-crisis levels, said the report. In the EU, unemployment is set to continue to decline, from 7.6 percent in 2017 to 7.1 percent in 2018 and 6.7 percent in 2019, it said. Unemployment in the euro area is forecast to fall from 9.1 percent in 2017 to 8.4 percent in 2018 and 7.9 percent in 2019.

Inflation will rise slowly, as underlying pressures strengthen, it predicted.

“Consumer price inflation weakened in the first quarter of this year, but is expected to pick up slightly in the coming quarters, partly due to oil prices that have recently increased," said the report.

"Overall, inflation in the euro area is forecast to remain the same in 2018 as in 2017 at 1.5 percent and then rise to 1.6 percent in 2019. In the EU, the same pattern is expected, but with inflation forecast to continue at 1.7 percent this year before rising to 1.8 percent in 2019."