Like the International Monetary Fund (IMF) and the World Bank, which revised their annual growth forecasts for Turkey upwards in October, the EBRD and the European Commission announced this month growth expected of 9% against respectively 5.5% and 5.2% estimated previously.
These new estimates are justified by the strong growth recorded in the first half of the year (+14.5%) and export performance favored by the historically low Turkish lira. The country also benefits from the reorganization of global supply chains and asserts itself more as a regional and global production hub.
Indeed, thanks to its geostrategic location near european markets, its competitive labor costs, its value-added offer and the current depreciation, Turkey is considered as an essential alternative for sourcing.
In return, Turkey records, like many other economies, high inflation due to the global surge in energy prices and the supply problems of raw materials (+20% inflation in Turkey year-on-year for the month of October 2021). This inflation has been intensified by the recent depreciation of the Turkish lira (27.7% loss of value of the Turkish lira against the dollar in one month between 26.10.2021 and 27.11.2021) which is explained by the the central bank's policy to keep interest rates low to stimulate exports, investment and employment as well as domestic consumption. This monetary policy also aims to rebalance the trade balance of the country whose deficit was reduced by 14.6% year-on-year over the period January-September 2021.
Read the Newsletter (in French) in PDF format