WASHINGTON
A statement by IMF said that after growing well above trend in 2010 and 2011, the Turkish economy has slowed to a more sustainable 3 percent growth rate this year. Growth has also become more balanced, as domestic demand and imports decelerated on the back of tighter monetary and macro-prudential policies implemented in 2011, while exports continue to perform well thanks to successful diversification towards new markets.
The current account deficit has shrunk significantly by 33 percent year-on-year in the year to August. Inflation, both headline and core, was also coming down from its peak in early 2012.
Executive Directors of IMF commended the Turkish authorities for setting the stage for more sustainable and balanced growth in 2012, accompanied by declines in the current account deficit and inflation. Directors noted that the outlook was clouded by external uncertainties, and that Turkey remains vulnerable to shifts in market sentiment, given the country's still large external financing needs. Policy priorities thus need to remain geared toward a continued unwinding of imbalances.
Directors viewed the medium-term fiscal program for 2013-15 as a welcome step in the right direction.
