Unicredit Revised Its Growth Forecast For Turkey

Unicredit revised its growth forecast for Turkey. The institution updated its forecast upwards.

In a research note Unicredit published, it predicted that the Turkish economy will grow by 6 percent annually in the first quarter of 2021 and 1.2 percent compared to the previous period. The institution stated that its inflation forecast for May was 16.9 percent. Unicredit said, "The Turkish economy will likely grow 6 percent in the first quarter, exceeding our previous forecast of 4.4 percent annually.", and predicted that industrial production and sectoral confidence index will increase manufacturing and service activity, albeit slower than the last quarter of last year. Stating that net exports will have a positive effect on growth from an expenditure perspective, Unicredit stated that consumption expenditures may decrease due to the loss of momentum in retail sales and credit card expenditures. Stating that the economy may contract in the second quarter of 2021 due to the quarantine measures taken, Unicredit said that even if there is a contraction in the second quarter compared to the previous period, the annual growth may be around 17-18 percent due to the base effect. The institution, which expects inflation to be 16.9 percent in May with the slowdown in food and energy prices, which was 17.1 percent in April, underlined that this decline will be short-term, the upward price pressure continues and will become stronger when the economy opens.