Moody’s raises Turkey 2021 GDP forecast

Turkey’s 20+% growth spurt in 2Q2021 and strong data from summer months, is leading global institutions to up the 2021 forecasts.  Moody’s and JP Morgan recently revised their 2021-2022 growth forecasts upwards. However, 2022 growth outlook remains subdued despite the revisions. High chronic inflation and current account imbalances waiting to explode any time domestic demand recovers to pre-pandemic levels could crimp Turkey’s trend growth for years to come.



The rapid spread of the Delta variant of Coronavirus poses a growing risk to people all over the world. It also means that global economic growth may surprise on the downside, according to Moody’s Investors Service.


The world’s biggest credit rating company says low vaccination rates in many countries, the high level of serious infections and movement restrictions because of local lockdowns threaten the global economic recovery.


“We estimate that the G-20 economies will grow by 6.2 percent as a whole in 2021, after a 3.2 percent  contraction last year, followed by 4.5 percent  growth in 2022. G-20 advanced economies will grow by 5.6 percent collectively in 2021 and by 4.2 percent in 2022, while emerging markets will collectively expand by 7.2 percent in 2021 and slow to 5.1 percent growth in 2022,” Moody’s wrote.

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Moody’s says if China is excluded from its calculations G-20 emerging market economies will expand by 5.7 percent, slowing to 4.1 percent next year. The 10 emerging G-20 economies are Argentina, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Turkey.


International credit ratings agency Moody’s on Aug. 31 upgraded Turkey’s economic growth forecast for 2021 from 5 percent to 6 percent.


In its Global Macro Outlook 2021-22 report, Moody’s also revised the growth expectation of the Turkish economy for 2022 from 3.5 percent to 3.6 percent.


It noted that a recovery in the tourism sector supported the growth in the Turkish economy thanks to the ongoing global economic recovery and progress in COVID-19 vaccination.



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U.S.-based multinational banking and financial services company JP Morgan on Sept. 1 revised its estimate for Turkey’s economic growth for 2021 from 6.8 percent to 8.4 percent.



According to a report published by the firm, the Turkish economy continued to grow “at full speed thanks to robust domestic demand and surging export demand in the second quarter.”


The country’s economy expanded 21.7 percent year-on-year in the second quarter of 2021, in line with expectations, the Turkish Statistical Institute (TÜİK) announced on Sept. 1.


Following the rapid recovery since the start of the second half of last year, the JP Morgan report said, it is logical to see some moderation in growth in the upcoming period.


It also warned high unemployment, as well as coronavirus-driven uncertainties, pose downside risks to growth.


However, it noted that domestic sentiment is resilient, loan growth is still high and export figures are quite strong, saying high-frequency data back up the case for continued growth strength.


The firm did not change its 2022 forecast, keeping it at 3.4 percent.


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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 and has contributed to the financial daily Referans and the liberal daily Radikal.