IMF raises Turkey growth forecast

IMF raises Turkey growth forecast

The IMF sharply increased its forecast for Turkey’s economic growth this year but warned the prospects of a sustainable recovery from last year’s currency crisis have dimmed.

In a concluding statement published after an annual visit by IMF staff, the fund revised its forecast for full-year GDP growth in 2019 from -2.5% to 0.25%.

"Growth has rebounded, aided by policy stimulus and favourable market conditions, following the sharp lira depreciation and associated recession in late-2018," it said. "The lira has recovered and the current account has seen a remarkable adjustment," the FT cited the statement as saying.

The report warned, though, "the current calm appears fragile," citing concerns about bad debts in the corporate sector, low foreign currency reserves and the country’s heavy reliance on foreign financing as well as a growing fiscal deficit.

It said Turkey "remains susceptible to external and domestic risks” adding that “prospects for strong, sustainable, medium-term growth look challenging without further reforms."

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