Goldman Sachs revises Turkey GDP growth forecast

Goldman Sachs said on Thursday it had raised its forecast for Turkey’s 2022 GDP growth to 5.5% from 3.5%, while lifting its 2022 current account deficit forecast to $45 billion from $36 billion.

It said the Turkish Central Bank’s forex reserves had risen sharply since the third week of June and that, with less of an external funding constraint, it was updating its macro forecasts and market views.

“The additional funding implies that the need to tighten policy to avoid an external funding gap has declined substantially, and we think policy-makers will use this space to support growth,” it said in a note.

Data on Wednesday showed Turkey’s economy grew 7.6% year-on-year in the second quarter as expected, extending a hot streak on strong domestic demand and exports.