Posted on 07 October 2010
The International Monetary Fund has just upgraded Turkey for the second time in 12 months, but it is still giving a very conservative projection.
The IMF increased their 3.7% 2010 growth forecast made in October 2009, to a forecast of 5.2% in April this year. They have now increased this to a growth of 7.8%.
Compared to the forecast of 4.8% for global growth, the 2.2% growth forecast for advanced economies, and the 7.1% growth forecast for emerging economies, this is a strong prediction. But considering that the Turkish economy has grown 11% year on year in the first half of 2010, this must be considered a conservative forecast.
The IMF concedes that Turkey will be the fastest growing economy in Europe this year. This follows the announcement from the Organisation for Economic Cooperation and Development that Turkey is the fastest growing economy in the Organisation at the present time.
But if everyone grows as expected next year, then Turkish growth will be more in line with the global average and the growth of advanced economies.
The IMF forecasts 3.6% growth for Turkey next year, well above their 2.2% forecast for growth in advanced economies, but slightly below their world economic growth forecast of 4.2%.
This moderation is not as bad as it sounds. The Turkish government is currently trying to solidify its econonmy; to reduce unemployment, maintain the handle on inflation, pay off loans to the IMF (expected to be completely paid off in 2013) and close the distribution of wealth gap.