The United Nations Conference on Trade and Development (UNCTAD) revised Wednesday Türkiye's economic growth forecast for this year raising it to 3.7% from 2.6%.
"The country was hit hard by high energy prices in 2022 but retained strong domestic demand throughout the first half of 2023 thanks to strong fiscal support, an effective program of transfers to households, and a 10-point cut of the policy interest rate," it said in its Trade and Development Report.
"However, while the latter provided stimulus to domestic demand, it placed pressure on the currency," it added, noting that Türkiye's economy is expected to grow 1.9% in 2024.
Last month, Fitch Ratings also raised its forecast upward for Türkiye's economy. Its Global Economic Outlook report expects it to grow by 4.3% instead of 2.5% following stronger-than-expected growth in the second quarter.
Official data earlier pointed to Türkiye's economy growing by a more-than-expected 3.8% in Q2 following the revised growth of 3.9% in the first quarter, despite the prolonged effects of early February earthquakes.
Meanwhile, UNCTAD estimates world economic growth slowing from 3% in 2022 to 2.4% in 2023.
The intergovernmental organization within the U.N. Secretariat, in addition, called for global financial reforms and more pragmatic policies to tackle challenges.
"To safeguard the world economy from future systemic crises, we must avoid the policy mistakes of the past and embrace a positive reform agenda," UNCTAD Secretary-General Rebeca Grynspan said in a statement.
"We need a balanced policy mix of fiscal, monetary and supply-side measures to achieve financial sustainability, boost productive investment and create better jobs. Regulation needs to address the deepening asymmetries of the international trading and financial system," she added.
UNCTAD revised the U.S. economic growth forecast to 2% this year, from its previous projection of 0.9%.
Euro area's growth estimate, on the other hand, was revised down to 0.4% for 2023, from 0.7% due to a slowdown in the largest economies, with the German economy expected to contract 0.6% this year.
China's economy is anticipated to expand by 4.6% in 2023, instead of 4.8%, according to the report.
