Turkey will swerve recession, says IMF

turkish lira

Turkey is unlikely to go into recession this year, the International Monetary Fund (IMF) has announced.

Following close monitoring by the organisation, an IMF report released this week predicts positive growth this year of 0.25%.  

"Buoyed by expansionary fiscal policy, rapid state bank credit provision, a strong contribution of net exports, and more favourable market sentiment, the economy registered positive growth in the first half of 2019," the report said.

Positive market sentiment mean good opportunity for the government to carry out the reforms necessary to address chinks in the economic armour, strengthen policies and foster sustainable economic growth.

The report added that the embattled lira was looking in better shape, inflation had slowed and the country's current account had seen a remarkable recovery after the currency's 2018 slide.

Fewer imports, a strong tourism season, improved market sentiment and a settled geopolitical landscape had taken the pressure of the lira, allowing for recovery.

"High real policy rates, lira stability, favourable base effects, and resulting lower inflation have allowed the Central Bank of the Republic of Turkey to cut policy rates." 

The upcoming New Economic Program will help pinpoint economic challenges and come up with a set of policies to address them, the report added.


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