AMSTERDAM: Turkey’s economy will expand more than previously expected in 2017, thanks to strong government and consumer spending, according to a new Bloomberg survey.
Economists boosted their forecasts for the sixth month in a row and expect gross domestic product to grow 4.1 per cent this year compared with 3.9 per cent previously. The economy grew 5 per cent in the first quarter compared to a year earlier, beating all estimates, as the government rolled out record breaking stimulus measures to help growth.
Last month, Turkey’s central bank kept all its main interest rates unchanged and said it would keep policy tight until the outlook for consumer inflation improves. Economists maintained their inflation forecasts across the board this month and continue to see consumer prices averaging 10.4 per cent this year and ending the year at 9.4 per cent.
“Economic growth will be strong enough, thanks to government’s sectoral stimulus which contributed to domestic demand,” wrote Enver Erkan, an analyst at Reel Kapital Securities in Istanbul, “Also, the contribution of European economies’ recovery will be positive via the net exports channel. We expect inflation to remain in double digits until the end of the year and decline to 9.4 per cent in December through the base effect.”
