OECD revises 2019 Turkey GDP forecast from contraction to growth

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The Organization for Economic Co-operation and Development (OECD) on Wednesday revised its 2019 gross domestic product (GDP) predictions for the Turkish economy, anticipating 0.3 percent growth instead of its September projection of 0.3 percent contraction, the pro-government Hürriyet Daily News reported.

In the latest issue of its Economic Outlook report, the Paris-based organization also made upward GDP revisions for 2020 and 2021, changing its forecast from 1.6 percent to 3 percent and 2.3 percent to 3.2 percent, respectively.

“Growth has continued to pick up over recent months. Substantial government stimulus is lifting domestic demand more vigorously than previously anticipated and currency depreciation is supporting exports,” it said.

Yet, weak external trade demand, geopolitical uncertainties and impaired private balance sheets are projected to keep GDP growth at around 3 percent, well below potential growth, the OECD added.

The OECD expects private consumption to increase by 4 percent next year, after contracting 0.6 percent in 2019. The growth in private consumption will ease slightly to 3.8 percent in 2021, according to the organization.

It also projects that the country’s exports will grow 5.2 percent this year.

The OECD forecasts that Turkey’s current account surplus will amount to 0.3 percent of expected GDP this year; however, the current account balance will post a deficit of 0.7 percent of GDP in 2020 and 1.3 percent of GDP in 2021.

The organization expected the world economy to expand at the slowest pace in a decade in 2019 and 2020, the state-run Anadolu news agency reported.

World economic growth is estimated to hit 2.9 percent for both this year and next, and 3 percent for 2021. The projection for 2020 was downgraded from 3 percent in the organization’s previous report.

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