Turkey revises down year-end growth to 3.6 pct
The Turkish government has revised down its growth expectations for this year to 3.6 percent, a significant acceleration from last year's 2.2 percent gain but well below the 8.8 percent expansion of 2011, which was Europe's best Today`s Zaman reported.
The government earlier targeted growth of 4 percent this year.
Turkish Deputy Prime Minister Ali Babacan told reporters on Tuesday that the government is targeting 3.6 percent of growth while the growth will rise to 4 percent next year and 5 percent growth in both 2015 and 2016.
The government's end-year inflation target was also raised to 6.8 percent from 5 percent this summer. Babacan said the expected inflation next year is 5.3 percent.
The International Monetary Fund said last week that inflation should remain above the target of 5 percent this year and next, exacerbated by the depreciation in Turkey's lira.
Turkey has been among the most high-profile victims of the shift in global capital prompted by signals the Federal Reserve would rein in its ultra-easy monetary policy. The lira gained sharply when the US central bank surprised markets in September by holding fire on an actual cut in bond-buying.
Turkey's central bank governor, Erdem Bascı, said last week the lira's fall had worsened the outlook for inflation. He said the bank would implement additional monetary tightening in its complex money market operations if there were risks of price growth getting out of control.
Turkey's central bank has sold more than $9 billion of its roughly $50 billion in readily available foreign currency reserves in the past three months, raising questions about its ability to resist another bout of currency volatility.
The IMF said Turkey's high domestic demand should lead to growth of 3.8 percent this year and 3.5 percent next year, assuming current macroeconomic policies stay in place. But growth driven mostly by demand is worsening the country's current account deficit and inflation, the IMF said.
Babacan noted that the government is targeting Turkey's year-end current account deficit at 7.1 percent of its gross domestic product. Babacan said the government expects the primary surplus to stand at 1.2 percent of national output this year.
Turkey's gaping current account deficit, mostly driven by huge energy imports, and high foreign debt have made it one of the most exposed to the shift in global capital.
Babacan said the government will put more weight on domestic and renewable energy production in periods ahead.