- IMF raises Turkey's growth expectation
World Bank Turkey director Johanssen Zutt, International Monetary Fund (IMF) in Washington-- World Bank annual meetings, n answered AA Correspondent's questions.
Pointing out that Turkish economy has overcome shocks of last year very quickly, Zutt reported that World Bank would update its growth expectations for Turkey after announcement of GDP figures for third quarter.
Zutt said new growth estimates expect IMF to be close to figures announced last week, "we will revise Turkey's growth forecast this year to 5 per cent or 5.1, similar to IMF's expectation. Because we expect that strong performance we follow in second quarter continues in third quarter, "he said.
"A stronger recovery than expected"
Emphasizing strong growth performance of Turkey's many organisations, Zutt stressed that government's expanding fiscal policies play an important role, following noted:
"The growth fell dramatically after unsuccessful coup attempt, but government, which manages economy well, used current financial opportunities. The financial expansion applied helped to recover economy. Moreover, positive foreign environment, which accelerated growth in Europe, strengned fiscal enlargement. I think y brought us a stronger recovery than World Bank and many or people expected. "
The World Bank expects Turkish economy to grow around 3.5 per cent next year, Zutt said, "We foresee that economy may continue to grow slightly lower than that of current survey. Therefore, we expect growth to return to a 3.5-4 per cent trend, "he said.
Zutt noted that Government is also able to hold a 5.5 per cent growth target for next 3 years.
"Sustainable growth can be achieved with structural reforms"
Emphasizing that Turkish economy can reach a higher sustainable growth path only with structural reforms, Zutt is to make labour market more efficient, expand capital markets, manage public expenditure, The need for reform in areas such as improvement and improving quality of education, he explained.
"I think biggest challenge for Turkey is medium-term, increasing efficiency of Turkish companies. The efficiency of companies in Turkey has been horizontal for years. The technology used in products exported from Turkey to Europe began to fall rar than watching a horizontal cruise. Turkey needs to increase technology used in products sold to Europe, "he said.
"We anticipate that inflation will land at 7-8 per cent again"
The Turkish Republic Central Bank (CBT) responded in accordance with rising inflation, " TCMB, in fact, is right for inflation with strict monetary policy. Although we have seen a splash of 10 percent right now, we foresee that inflation will return to 7-8 percent in near future, "he said.
"Turkey's biggest fragility is to be dependent on foreign capital flows to finance current deficit," Johanssen Zutt said, noting that savings in Turkey are very low compared to investments made.