The government will announce an updated version of the Medium-Term Economic Plan today as a series of internal and external shocks caused deviations in some macroeconomic figures. The plan, which is a projection of the next three years, includes growth targets, inflation expectations and target unemployment rate numbers.
The Medium-Term Economic Plan was one of the outstanding issues discussed during yesterday's Cabinet meeting chaired by President Recep Tayyip Erdoğan.
Due to internal and external issues including the July 15 failed coup attempt, the plan has undergone changes as the economic impact of the coup attempt, which was weaker than expected, has been clarified in the third quarter of the year. In line with this, terrorist activities increased after the Medium Term Economic Plan was published, disrupting the tourism sector more than was expected. Last week, Deputy Prime Minister in charge of economy Mehmet Şimşek pointed out that the scenarios for the plan were constructed without taking into account the possibility of a coup attempt, adding that tourism has been worse than was anticipated for the year. Recalling that the anticipated impact of recent events was underestimated, Şimşek said that economic growth dropped by one point solely because of tourism.
Turkey's growth was weaker than expected for this year, decreasing to 3.1 percent in the second quarter from 4.7 percent in the first quarter. The 4.5 percent growth target set for the 2016 in the government's Medium-Term Economic Plan no longer seems attainable, so new growth targets for 2016, 2017 and 2018 are expected today.
Turkey aimed to bring the annual inflation rate down from 8.81 percent in 2015 to the 5-to-7 percent range over the next three years, according to the plan announced in January. The inflation rate has been forecasted at 7.5 percent in 2016, 6 percent in 2017 and 5 percent in 2018.
Meanwhile, according to data released by the Turkish Statistical Institute (TurkStat) yesterday, Turkey's annual rate of consumer price inflation decreased sharply in September after clothing and food prices fell.
The annual inflation rate was 7.28 percent in September compared with 8.05 percent in August and 7.95 in September last year, TurkStat said in a statement posted on its official website.