OECD foresees sharper contraction in Turkish economy for 2019

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The Organization for Economic Co-operation and Development (OECD) has revised its projection for Turkey’s GDP, forecasting a 2.6 percent contraction in 2019 instead of the previously anticipated 1.8 percent, the Diken news website reported on Tuesday.

The updated expectations were released in the OECD Economic Outlook May 2019.

The report also reduced the growth forecast for 2020 from 3.2 percent to 1.6 percent.

The inflation rate will remain in double digits until at least the end of 2020.

The report said investor uncertainty remains high after the local elections of March 31 and that uncertainty affects business and household sentiment.

“The central bank should aim to enhance its credibility and to re-build its net international reserve position,” it said.

“A gradual upturn is foreseen from the second half of 2019, on the assumption that Turkey will face no further confidence shocks.”

“However, if current uncertainties continue to prevail and confidence remains fragile, Turkey would remain vulnerable to turbulences and headwinds, and GDP growth would be weaker.”

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