Istanbul: Turkey will miss official economic growth forecasts this year and next following the failed coup that has hammered the lira and put renewed pressure on the tourism sector, according to economists in a Reuters poll.

The survey of 41 economists based in and outside Turkey, taken this week, predicted the economy would grow 3.5 per cent this year and next, below the government’s respective forecasts of 4.5 and 5 per cent.

Turkish GDP grew a stronger-than-expected 4 per cent in 2015 and 4.8 per cent in the first quarter of 2016.

The country’s tourism sector has taken a battering this year as tensions with Russia and a spate of bombings hit tourist arrivals. Economists forecast tourism revenue would drop by about $8 billion (Dh29.37 billion) this year, equivalent to 1 per cent of GDP.

The lira slumped to a historical low on Wednesday after President Recep Tayyip Erdogan declared a three-month state of emergency, which economists said could further harm tourism.

Turkey’s external borrowing costs may rise and downside risks have increased following last Friday’s failed coup, Deputy Prime Minister Mehmet Simsek said on Thursday.

“There are a few reasons for the slowdown we are expecting: a deterioration in tourism and, secondly, that companies with foreign exchange debts have seen their financing costs rise due to the weaker lira,” said Finansbank economist Deniz Cicek.

“A slowdown in the global economy and the impact of Brexit on the EU economy could impact growth negatively from trade. The coup attempt may escalate this slowdown by increasing external financing costs and further denting tourism.”

Turkey is largely dependent on imports for its growing energy needs and relies heavily on tourism to help fund its current account deficit, which stood at more than $32 billion in 2015, or about 4.5 per cent of GDP.

The number of foreign visitors to Turkey fell more than a third in May, the biggest drop in at least 22 years.

Relations between the Kremlin and Erdogan remain strained over the Syria crisis and the Turkish shooting down of a Russian fighter jet in November, despite an agreement last month to resume bilateral cooperation.

“Interest rate hikes in the US are likely to come back onto the table later in the year, which could make external financing conditions more difficult and cause the lira to drop ... The recent events will almost certainly make growth weaker.

In the near-term it will hit confidence and may result in weaker consumption and investment,” said economist William Jackson at Capital Economics.

“Over the longer term, it could reduce investment and productivity growth. We haven’t changed our forecasts yet, but the risks clearly lie to the downside and we plan to revisit them once the dust settles.” Inflation has been in a downward trend, but in its latest Monetary Policy Committee decision the central bank said inflation may show a marked increase in the short term due to developments in unprocessed food and tobacco prices.

Consumer prices rose 7.64 per cent year-on-year in June.

Inflation will remain significantly above government targets in the next two years. Economists expected 7.8 per cent inflation in 2016 and 7.5 per cent in 2017. The government aims to keep inflation at 7.5 and 6 per cent respectively.

The risk to inflation is coming from a depreciation in the exchange rate, Simsek said on Thursday.

Turkey has missed its inflation targets for five years in a row, with a 20 per cent lira depreciation against the dollar and rising food prices to blame for the failure last year.