European bank adjusts Turkish economic growth prediction amid tightening monetary policy
Date
5/15/2024 4:58:12 AM
(MENAFN) The European bank for Reconstruction and Development (EBRD) revised its growth forecast for the Turkish economy, anticipating a growth rate of 2.7 percent, a slight decline from the previous forecast of three percent. This adjustment was disclosed in a statement released by the bank, wherein it highlighted expectations for continued tightening of monetary and financial policy amidst persistently high levels of inflation. The EBRD's outlook also projected an uptick in economic growth for Turkey to three percent in 2025, attributing this to anticipated measures aimed at addressing inflationary pressures.
The EBRD's Regional Economic Outlook report, covering the economies within its purview, provided insights into the recalibration of growth expectations. Last September, the bank had already revised its regional economic growth projections downwards by 0.2 percent, settling at three percent. Despite this adjustment, growth in the economies under the EBRD's umbrella reached 2.5 percent last year.
The downward revision in growth expectations for the Turkish economy, from three percent to 2.7 percent, reflects the anticipation of sustained tightening of monetary and financial policy to counter inflationary pressures. The EBRD's assessment suggests that measures such as tax increases and precautionary policy actions contributed to economic growth in Turkey last year, alongside developments in the services sector and post-earthquake reconstruction efforts.
The EBRD's adjustment underscores the delicate balance between stimulating economic growth and managing inflationary risks in Turkey. As the country grapples with persistently high inflation levels, policymakers are expected to navigate a prudent course of action to support economic expansion while safeguarding price stability. The bank's insights into the factors shaping Turkey's economic trajectory provide valuable context for stakeholders monitoring the country's economic performance amidst evolving macroeconomic dynamics.
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