Turkey Economic Forecast

Turkey Economic Outlook

February 6, 2018

High-frequency indicators suggest economic momentum, while resilient, moderated in recent months. It was aided by robust domestic demand and a recovery in the external sector, but hampered by the government’s depleted fiscal stimulus. Economic conditions remained supportive of growth early this year, with the manufacturing PMI recording its highest figure in seven years in January, and both consumer and business sentiment shooting up in the same month. Nonetheless, the blistering pace of growth in 2017 came at the expense of a deterioration in the country’s external metrics: The 12-month rolling current account deficit widened to a three-year high in November, further exposing the country to shifts in investor appetite because of Turkey’s reliance on short-term inflows to finance its deficit.

Turkey Economic Growth

Economic growth will experience a soft landing this year as the government limits the extent of its fiscal stimulus and focuses on maintaining the economy on a steady course ahead of next year’s twin elections. In addition, a weak dollar and strong investor sentiment towards EM assets boosted inflows of foreign capital last year, but further tightening by the Fed this year and swings in global market sentiment continue to pose major threats to Turkey’s financial stability. The Met the why particular panel expects growth of 3.9% this year, which is up 0.2 percentage points from last month’s estimate. It also expects growth of 3.8% in 2019.

Turkey Economy Data

20122013201420152016
Population (million)75.676.577.378.779.8
GDP per capita (USD)11,52912,41512,08411,89311,731
GDP (USD bn)872950934858856
Economic Growth (GDP, annual variation in %)4.88.55.26.12.9
Domestic Demand (annual variation in %)3.59.53.66.43.1
Consumption (annual variation in %)3.27.93.05.52.3
Investment (annual variation in %)2.713.85.19.23.0
Industrial Production (annual variation in %)2.43.53.52.91.8
Unemployment Rate8.49.111.011.311.9
Fiscal Balance (% of GDP)-1.9-1.0-1.1-1.0-1.1
Public Debt (% of GDP)36.236.133.527.528.3
Money (annual variation in %)12.521.511.918.416.6
Inflation Rate (CPI, annual variation in %, eop)6.27.48.28.88.5
Inflation Rate (CPI, annual variation in %)8.97.58.97.77.8
Inflation (PPI, annual variation in %)2.57.06.45.79.9
Policy Interest Rate (%)5.504.508.257.508.00
Stock Market (annual variation in %)52.6-13.326.4-  -  
Exchange Rate (vs USD)1.782.152.332.923.53
Exchange Rate (vs USD, aop)1.801.912.192.733.02
Current Account (% of GDP)-5.5-6.7-4.7-3.7-3.8
Current Account Balance (USD bn)-48.0-63.6-43.6-32.1-32.6
Trade Balance (USD billion)-65.4-79.9-63.6-48.1-11.9
Exports (USD billion)162162169152150
Imports (USD billion)227242233200191
Exports (annual variation in %)13.7-0.14.4-11.0-1.2
Imports (annual variation in %)-1.86.3-3.8-14.0-4.5
International Reserves (USD)99.911111792.992.2
External Debt (% of GDP)38.941.143.046.247.3

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Turkey Facts

ValueChangeDate
Bond Yield11.59-0.09 %Feb 22
Exchange Rate3.78-0.85 %Feb 22
Stock Market116,8411.41 %Feb 22

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