The upward revisions of growth estimates for Turkey by main financial institutions continued after the announcement last month of Turkish GDP growth results for the year 2020 (+ 1.8%):
- Moody's revised its forecast from 3.5% to 4% for 2021 and from 4% to 5% for 2022
- Fitch now estimates growth at 6.7% for 2021 (vs. 3.5%) and 4.7% for 2022 (vs. 4.5%)
- The World Bank predicts 5% for 2021 instead of 4.5% previously
- Finally, the OECD has raised its growth forecasts from 2.9% to 5.9% for 2021.
The figure of Turkish exports in the 1st quarter ($ 50.2 billion, up 17.3% year-on-year), the expected easing of restrictions linked to the pandemic which should encourage the resumption of tourism, very affected by the crisis, support strong growth forecasts for 2021.
Inflation, however, remains an important issue for the Turkish economy; it reached over 16% in March, its highest level since mid-2019 after the appointment of a new central bank director. The latter nevertheless reassured financial markets and foreign investors by keeping the key rate unchanged at 19%, in line with market expectations and intends to continue implementing a strict monetary policy to bring the inflation rate below 10% at the end of the year with the objective of lowering it to 5% by 2023.
Finally, in terms of health, the Turkish authorities have decided to tighten the measures in the face of the resurgence of cases of contamination linked to a partial reduction in travel decided in early March. The curfew is now extended from 7 p.m. to 5 a.m. on weekdays and remains total on weekends. These restrictions will be stricter from April 30 to May 16, that is to say until the end of the Ramadan holidays, a period during which all professional activities will be suspended except for certain trades (production, cleaning service, food chain ...). Face-to-face education will also be suspended in all establishments and examinations postponed. The groceries will be authorized near his home only. Finally, interurban travel will be prohibited except for certain compelling reasons.
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