The World Bank does not expect a recession in Turkey, said Franziska Ohnsorge, manager of the bank’s Development Economic Prospects Group, the state-run Anadolu news agency reported on Wednesday.
Speaking to the agency, the economist suggested that they have looked at what happened when there is a sharp currency depreciation based on a database of years and countries which saw a depreciation of 30 percent or higher compared to the previous year, and they have concluded that depreciation does not necessarily cause a recession.
“A sharp depreciation is something very different than a recession. Our forecast [for Turkey] is predicated on that,” Ohnsorge said, adding that what they are forecasting is that Turkey does not differ that much from those other countries which experienced a sharp depreciation over the last 30 to 40 years.
Ohnsorge also noted that Turkey’s economic growth is expected to slow this year, 1.6 percent according to the latest Global Economic Prospects report released on Tuesday.
The report forecast growth of 3.0 percent in 2020 and 4.2 percent in 2021.
The Turkish lira had fallen as much as 47 percent against the dollar during last year’s currency crisis, raising concerns about a banking collapse and an economic meltdown. It has since recovered some of the losses, finishing last year down nearly 30 percent against the dollar.