LONDON
Fitch upgraded Turkey’s growth forecast for this year due to a better-than-expected economic performance, according to a senior director at the ratings agency.
Speaking on Tuesday, Paul Rawkins said that Fitch had raised Turkey’s 2014 growth forecasts from 2.7 percent to 3 percent thanks to the current economic performance of the country, which is moderately higher than expected.
Rawkins noted that this performance is also likely to be affected positively by a drop in oil prices in the forthcoming period.
“We pushed up [the growth forecast] a little bit. The outcome came a bit a better than we expected actually. [The] economy got momentum and … I think the last part is going to be helped by lower oil prices which would ease things,” Rawkins said.
Explaining that Turkey’s current account deficit will be smaller than their first estimates, Rawkins said the declining oil prices will further help decrease the shortfall.
“The current account deficit is not going to be as large as we initially thought. Those are the factors which lend support for the positive side. Oil prices coming down will take some of the pressure on the current account deficit. That has quite an effect on growth,” he said.
Fitch forecast Turkey to grow by 3.3 percent in 2015 and 4 percent in 2016, Rawkins noted. The agency has forecast inflation in Turkey to reach 8.2 percent at the end of this year and abate to 7 percent in 2015 and 5.8 percent in 2016.
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