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Dec 07 2018

Turkish 2018 growth to lag government target – Reuters poll

Turkey’s economic growth this year will probably be significantly less than an estimate set by the government in September, just after a currency crisis swept through the economy.

The economy may expand by 2.8 percent, lagging the government’s prediction of 3.8 percent, according to a Reuters poll of economists. The economy grew 7.4 percent last year, driven by government incentives and tax cuts.

Economic growth was likely to have totalled an annual 2 percent in the third quarter, the average estimate in the survey of 15 economists predicted. The Turkish Statistical Institute is due to announce data for the three months to September on Monday.

Turkey’s economy would have contracted in the third quarter if it wasn’t for the contribution of exports, said Ozlem Bayraktar Goksen, chief economist at Tacirler Yatirim, according to Reuters.

“Composite indicators for both investments and consumption have given signals of the significant deterioration in the third quarter,” she said.

The government’s growth estimate for 2019 is 2.3 percent. Moody’s, Fitch, the Organisation for Economic Cooperation and Development (OECD) and the International Monetary Fund all predict much lower or negative figures for next year.

Economic growth estimates by governments are important because they reflect on goals for tax revenues and expenditure in the budget. Lower growth than predicted would usually mean that a government misses its budget goals.