Fitch Lowered Its Growth Forecast For Turkey

Fitch lowered its growth forecast for Turkey. Fitch lowered its growth forecast for 2021, which it previously announced as 6.7 percent.

International credit rating agency Fitch Ratings, in its global outlook report announced in June, reduced Turkey's 2021 growth forecast from 6.7 percent to 6.3 percent. Expressing that the Turkish economy continues to exceed expectations with domestic demand and improving net trade balance, Fitch pointed out that the momentum in the fourth quarter of 2020 continues. Organization said, "Although the risk of sagging is high for the remainder of 2021, we are updating the 6.7 percent growth forecast we announced in March to 6.3 percent." Fitch underlined that the weakening consumption with the slowdown in credit will be balanced by the recovery in tourism in the second half of 2021. Expecting the growth in Turkey to slow down to 3.7 percent in 2022, Fitch Ratings predicts that monetary policy will loosen again before the elections in 2023 and the growth will be 4.5 percent.

Expected Inflation is 15.5 percent

Expressing that the inflationary pressure decreased a little more in May, the organization noted that they expect inflation to be 15.5 percent by the end of 2021, with the positive base effect. In the report announced by Fitch Ratings in March, the 2021 inflation expectation for Turkey was 11.5 percent. Estimating that inflation will gradually decrease to 12 percent in 2022, Fitch predicts inflation to be 9.3 percent at the end of 2023.