According To Unicredit Fastest Growth In Eastern Europe Will Be In Turkey

According to a report prepared by Unicredit economists, fastest growth in Eastern Europe will be in Turkey.

Unicredit economists, including Gökçe Çelik, stated in a research report they published that they expect Turkey to grow by 7.5 percent in 2021 to become the fastest growing country in Eastern and Central Europe. The previous forecast of Unicredit economists was that Turkey would grow by 4.7 percent in 2021. Unicredit economists stated that if financial conditions continue to remain tight, growth may decrease to around 3.5 percent in 2022, and pointed out that Turkey managed to return to pre-epidemic levels in the second half of 2020. Stating that cyclical inflation, excluding fuel and energy, peaked in Turkey and Russia, economists noted that the impact of the depreciation in the exchange rate with the foreign exchange permeability still continues. Economists, who do not foresee a rate cut until the fourth quarter of 2021, predict that the interest rates will be reduced to 16.5 percent with a 250 basis point cut in the last quarter, and to 13.5 percent with a 300 basis point cut in 2022. Unicredit economists, who stated that the Turkish Lira will continue to weaken despite the decreasing current account deficit, underlined that an early and excessive monetary easing continues to be the biggest risk factor for Turkey.