After posting 1.8% GDP growth amidst the pandemic, officials are upping 2022 growth estimates, while Fitch rating agency, which produced the latest economic summary among main rating agencies seems to largely agree with them.
On August 20, finance minister Lutfi Elvan said the government now expects 2021 growth at over 8%. The current account deficit was forecast by top officials to come in at 3% of GDP and the budget deficit at 3.5% of GDP. Officials also stick to Central Bank’s 16% year-end CPI estimate, claiming hope after hope that it shall decline to single digits in 2022.
Elvan also heralded 3 new lending campaigns under the state’s Credit Guarantee Fund (KGF) are to be launched. In the past, CGF basked loans sold like hot cakes, triggering short-lived economic booms, but adding to current account deficit and inflation woes.
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The official target for growth in 2021 in the government’s medium-term program still stands at 5.8%.
The government is supposed to revise the program in September, but in recent years it has stalled the revision to October.
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Previously, on August 4, President Recep Tayyip Erdogan stated that growth in 2021 was on course to exceed 7%.
Fitch concurs
Fitch Ratings hiked its expectation for 2022 GDP to 7.9% from the 6.3% it was anticipating in June, with Turkey’s trade minister Mehmet Mus on August 14 subsequently joining the bidding, talking of a release that would beat 8%.
On August 18, Erdogan, who has recently been holding evening chats with his party hacks on TV rather too often, reiterated that the previous 5.8% official target would be left in the dust.
The economy grew 7% in the first quarter of this year. President Recep Tayyip Erdogan recently said the full-year growth could exceed that, driven by an expected 20% leap in the second quarter, mainly due to the base effect.
Data from last week, which showed the country’s industrial production surged 41.1% year-on-year in the April-June period, further reinforced views that the gross domestic product (GDP) growth could come in even above 20% for the second quarter.
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