ISTANBUL (Reuters) – Analysts expect the Turkish economy to grow around 3% this year and next, according to a Reuters poll issued on Thursday, well shy of a government forecast as it recovers from a recession that left economic activity treading water last year.
The economy, which contracted year-on-year in three consecutive quarters to mid-2019, is likely to have logged a slight expansion of 0.2% for all of last year, going by the median estimate in the poll.
A previous poll in October predicted a contraction of 0.3% for 2019, after a bruising currency crisis in 2018.
Ankara has set an ambitious target of 5% growth for both 2020 and 2021 and has urged the central bank to lower its policy rate, which stands at 12% after aggressive easing since July, to help the recovery along.
The median estimate in the Reuters poll of 52 economists was for 2.8% gross domestic product (GDP) growth in 2020, and 3% GDP growth in 2021, largely in line with the October poll.
The forecasts for this year ranged between economic expansions of 1.4% and 4.6%.
“The indicators do not point to a marked decline in the Turkish economy in the final quarter of 2019. We rather expect very weak but positive growth,” Germany’s DZ Bank said in a recent note.
“The economy … will continue on its course of recovery (in 2020), but with little momentum,” added the bank, which expects below-consensus growth for this year and next, due in part to political risk factors.
Turkish economic growth has averaged around 5% over the last two decades. But the 2018 crisis cut the Turkish lira’s value by nearly 30%, sent inflation soaring and severely crimped imports.
The poll predicted that inflation, which stood at 11.84% in December after hitting a 15-year high of more than 25% in October 2018, would ease further.
The median projection from 15 economists had annual inflation falling to 9.5% and 9% in 2020 and 2021 respectively.
Their consensus forecast was that the central bank would trim its policy rate to 11.5% by the end of the first quarter of 2020, and to 10.25% by year’s end.(For other stories from the Reuters global long-term economic outlook polls package: )
(Polling by Sarmista Sen and Indradip Ghosh; Writing by Ezgi Erkoyun; Editing by Jonathan Spicer and Kevin Liffey)