IMF: Turkish economy to grow at healthy pace

Published 13.11.2015 21:46

The International Monetary Fund (IMF) said the growth of the Turkish economy remained strong despite negative conditions in its latest report, the "Regional Economic Issues Report (REI) for Central, Eastern and Southeastern Europe (CESEE)." According to the Fall 2015 edition of the REI, Turkey's economic growth remained strong despite political instability and the increasing public debt, which risks a decline in investor trust. The IMF shared its expectations about Turkey, stressing that the Turkish economy will keep on growing at a healthy pace.

When going into detail regarding the Turkish economy, the report said that public expenses are being incurred in a way to support the growth, adding that public transfers and consumption are relatively low compared to the other countries in the region, whereas public investments are relatively high. The IMF also pointed out that in Turkey, inflation and the inflation expectations have been following a high trend. The IMF stressed that the expected interest rate hike from the Federal Reserve System (Fed) may result in some risks for the Turkish Lira and capital flows.

Moreover, in the report, it said that most of the CESEE countries continue to grow with the support of strong domestic demand, low oil prices and the amelioration of the eurozone, while the Commonwealth of Independent States' (CIS) economies, including Russia, Ukraine and Belarus, will contract. The report commented further on these CIS economies, saying that although the Russian economy has been trying to adapt to the conditions involving the low energy prices and other sanctions imposed, the economy will likely remain depressed in 2016, whereas Ukraine may experience positive growth despite difficulties over reforms, macroeconomic changes, and other economic problems in western parts of the country in 2016. Furthermore, the REI made general statements about the increase in downward risks such as the slowing Chinese economy and the refugee crisis, expressing that these are the recently added long-term risks.

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