ISTANBUL
Turkey is expected to grow by 4 percent next year, the head of one of the largest business associations in Turkey said on Monday.
“We forecast growth performance of Turkey to be around at 4 percent levels next year," Nail Olpak, president of the Independent Industrialists and Businessmen Association, or MUSIAD, said in a exclusive interview.
The statement comes at the time when the Organisation for Economic Co-operation and Development (OECD) downgraded Turkey growth forecasts, citing global economic slowdown, a fragile recovery in Europe and approaching probable interest rate hikes from the U.S. Federal reserve.
Recalling Turkey’s strong growth performance in 2013, Olpak said that Turkey managed to grow at a fast rate that year despite widespread anti-government protests and negative forecasts related to the turmoil.
“We should see what people had said and what happened. Despite all this, here was a Turkey with a 4.1-percent growth,” Olpak said.
Stressing that the first quarter of 2014 also was a time of political turmoil as local elections followed December 2013 anti-graft operations. Olpak pointed out that Turkey grew by 4.7 percent during that time.
However, Turkey’s growth performance in the second quarter of the year did fall to 2.1 percent, lowering growth performance for the first half of 2014 to 3.2 percent, according to official figures.
“Unfortunately, inflation remained above forecasts. Therefore, financial authorities decided to cool down the economy and growth receded to 3.2 percent in first half,” he said.
Olpak said that growth alone is not the most important factor for the economy, indicating that the current account deficit still posed a significant risk to the economy.
“I believe the current account deficit for this year to be at $45-47 billion. which will be a $20 billion improvement compared to last year. In that case, we can justify the slowdown in growth.” he said.
Turkey’s total current account deficit for the January-September period declined by $18.3 billion, compared to the same period last year, to reach $30.9 billion, according to figures from the Central Bank of Turkey released on Nov. 13, indicating that the year-end current account deficit target of $45 billion was attainable.
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