EBRD forecasts 5.5 pct growth in Turkish economy, 4.2 pct in emerging countries

Turkey’s economy is expected to grow by 5.5 percent in 2021 and 4 percent in 2022, according to the forecast of the European Bank for Reconstruction and Development (EBRD) released on June 29.


The forecast for Turkish economic growth this year is driven by exports, as the bank said domestic demand remains constrained by the impact of weaker household financial circumstances.


For 2022, the EBRD forecast economic growth of 4 percent in Turkey and 3.9 percent in its countries of operation.


During a virtual news briefing, EBRD President Odile Renaud-Basso confirmed the bank’s commitment to invest in green projects in Turkey with an emphasis on the environment, specifically with the private sector where 95 percent of the bank’s investments are made.


The EBRD revised its economic growth forecast to an average of 4.2 percent growth in emerging economies in eastern Europe, Central Asia and Northern Africa as the recovery gathers pace following the COVID-19 pandemic. The represents a better growth rate from the bank’s previous forecast cited in its Regional Economic Prospects report in October 2020 of 3.6 percent.


According to the EBRD, as the increasing rollout of vaccination programs and the improving situation in public health allows for a gradual withdrawal of social distancing measures and other restrictions, the economy has restarted.


“Our forecast shows that the recession has been a bit less dramatic than expected,” Renaud-Basso said.


Output contraction in 2020 was also milder at 2.3 percent than previously forecast, which was 3.9 percent following improvements in the overall economic environment late last year thanks to strong exports and fiscal support.



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Industrial production and retails sales have mostly recovered and the average mobility of people in the EBRD’s countries of operation has largely returned to the pre-pandemic levels, the EBRD said.


Higher commodity prices helped commodity exporters by boosting their revenues and manufacturing demand has been strong, the bank said.


In central Europe and in the Baltic states growth of 4.8 percent is expected this year and will reach 4.6 percent in 2022 with the impact of strong household consumption and investment supported by EU recovery funds, as the southern-eastern EU GDP is expected to grow by 5.2 percent this year and 5 percent in 2022.


The bank forecasts economic growth of 5.1 percent in the Western Balkans this year and 3.8 percent in 2022.



Source:  Anatolian News Agency



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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.