Figure up from previous expectations of 5% increase
The World Bank on Wednesday revised upward its projection for Turkey’s gross domestic product (GDP) growth for 2021 to 8.5%.
This came in the bank’s latest issue of its Economic Update Report for the Europe and Central Asia (ECA) Region.
The GDP growth figure was 5% in the June issue of the report.
The economy projected to grow 8.5% in 2021 before returning to a path of 3% and 4% in 2022 and 2023, respectively, the World Bank said.
“These baseline projections assume no further COVID-19 restrictions in Turkey or its major export markets or excessive flareups in macrofinancial conditions,” it underlined.
Turkey’s economy was one of the few among G20 and OECD countries to enjoy positive growth in 2020.
According to the World Bank, a favorable base effect, an easing of COVID-19 restrictions, and strong external demand led to double digit GDP growth in the first half of 2021, returning the economy and employment to pre-crisis levels.
Inflation is forecasted to stay high but gradually decline from 17.7% in 2021 to 15% and 13% in 2022 and 2023, respectively, it said.
The bank noted that rising international commodity prices and demand-side pressures added to rising inflation.
“As tourism and exports recover, the current account deficit is expected to narrow to 3% of GDP in 2021,” it noted.
Poverty to reduce
Poverty in Turkey is forecasted to reduce following sharp rises in 2019-2020, the World Bank said.
“The strong rebound in economic growth, the labor market and household incomes are expected to reduce the poverty rate from 12.2% in 2020 to 11.6% in 2021,”the bank said.
Further poverty reduction hinges on ensuring an inclusive recovery with adequate support for vulnerable groups, it noted.
Turkey’s economy expanded by 21.7% in the second quarter of 2021 – the second highest among G20 countries.