Growth Forecasts for Turkey in 2020

The “Annual Program of the Presidency of the Republic,” which outlines the growth forecasts for Turkey for the year 2020, was published on 5 November. It foresees an ambitious recovery of the economy with a high growth rate (5%).
The government’s growth forecast for the year 2020 seems ambitious compared to the expectations of banks and international institutions.
According to the “Annual Program of the Presidency” published on 5 November 2019, GDP contracted by 1.9% during the first half of 2019 before rising in the second half of the year, driven in particular by the agricultural sector (2.2% increase in value-added), by the recovery of the services sector (+0.9%, including construction) and by a smaller fall in industrial activity (-0.1%).
For 2019 as a whole, the program anticipates GDP growth of 0.5%, or USD 749 billion. For the year 2020, the plan forecasts an acceleration of growth, driven by the Central Bank’s cut in interest rates, the fall in the inflation rate (which should reach 8.5% by the end of 2020), the stability of the exchange rate and policies aimed at increasing the distribution of credit. Also, for the year 2020 as a whole, the program estimates that activity will be supported by growth in the industrial (+6%), services (+5%), and agricultural (+4%) sectors. Besides, the government anticipates an increase in consumption (private and public sectors combined) of 4.6% in real terms (i.e., a level twice as high as that forecast by the World Bank). Finally, the program anticipates a 5% growth for 2020, i.e., a GDP of 812 billion USD.
The “Annual Program of the Presidency” and the budget for 2020 have very high ambitions in terms of growth and budgetary control. The average growth forecasts for Turkey published by the leading banks and international institutions, around 2.4%, seems much more realistic, mainly because, despite the incentives implemented by the government and the Central Bank, credit distribution is still marking time. This more measured growth forecast also has an impact on the public finance projections: a deficit just below the 3% threshold seems hardly credible because a more moderate recovery in growth will, all other things being equal, lead to lower tax revenues. Nevertheless, the consolidation of public accounts remains more necessary than ever to increase the transparency of them, strengthen the credibility of government action, and reassure investors.
Source: https://www.tccb.gov.tr/en
Recent Posts
- Interview: The Affect of Communication Management Consultancy (2)
- Interview: The Affect of Communication Management Consultancy (1)
- Tesla is Hiring in Turkey
- Turkey Ranked First in Gaming Startup Investments
- The Russia-Ukraine War’s Effect on the Global Economy
- Waterless Washing Machine by LG Electronics Inc.
- IKEA is Moving Its Production to Turkey
- Turkish Furniture Industry
- The Chemical Industry in Turkey
- Exports of Automotive and Machinery Increased in Turkey
- The Latest Investments Made in Turkey
- The First Decacorn of Turkey
- 10 Turkish Startups are Becoming Unicorns
- Turkey’s Exports in June 2021
- 110.000 Jobs Created by Renewable Energy Projects in Turkey
- Dream Games Raised $155 Million Investment
- Hepsiburada: The First Turkish Company on Nasdaq
- 7 Technology Giants are Investing in Turkey
- Sinovac Granted the License to Turkey for COVID-19 Vaccine Production
- Joint Investment Opportunities of SOCAR and Turkish Petroleum