ISTANBUL (Reuters) – Turkey’s economy is expected to contract in 2019 for the first time in a decade and to see only modest growth in the following two years, a Reuters poll showed on Wednesday.
The poll of more than 40 economists showed the Turkish economy shrinking 1.5% this year, according to the median forecast. The government’s own sharply-lowered forecast for this year envisages an expansion of 2.3%.
Range - Estimates - July - Reuters - Poll
There was a wide range of estimates in the July 4-16 Reuters poll, from growth of 1% to a contraction of 5%. The poll sees growth of 2.4% in 2020 and 3.4% in 2021.
“Early indicators for Q2 point to a renewed slowdown because of financial market volatility and elevated political uncertainty, which raise the risk of a double-dip recession,” economists at Nomura said.
Quarters - Economy - Contract - % - %
In the second and third quarters of 2019 the economy is forecast to contract by 2.5% and 1.1%, respectively, before returning to growth of just 1.0% in the final three months of the year, the poll medians showed.
Second quarter GDP growth is due to be announced on Sept. 2.
Turkey - Economy - Basis - % - Growth
Turkey’s economy last contracted on an annual basis in 2009, by 4.7%. From 2010 to 2017, its compound growth rate was 6.6% thanks to a construction boom driven by cheap capital following the global financial crisis.
That lira slide pushed inflation to a 15-year high, severely limited companies’ ability to service foreign debt and multiplied bad loans in the banking sector.
Investors - Concern - US - Sanctions - Russia
Meanwhile, investors have voiced concern over possible U.S. sanctions after Russia delivered S-400...
Wake Up To Breaking News!