Turkey lowers economic targets
Following a decline in industrial output, Turkey cuts its growth forecast to 3.3% in 2014 and 4% in 2015, while raising the year-end inflation estimate from 5.3% to 9.4%.
The Turkish government has revised its year-end economic targets amid regional turmoil, rising inflation, a weakening currency and shrinking industrial output. The revisions were announced Oct. 8 as part of Ankara’s new medium-term program, its economic road map for 2015-17. The growth forecast was slashed to 3.3% from 4% for 2014, and to 4% from 5% for 2015.
Efforts to rein in inflation have proven a huge disappointment. Accordingly, the year-end estimate was raised to 9.4% from the earlier 5.3% projection, a level Turkey could now hope to achieve only in 2016, if everything goes as planned.
While Ankara has failed on inflation and growth, it has achieved notable progress in reducing the current account deficit. The economy management will now shift its priority to battling inflation and move the current account deficit problem to second place, with structural reforms third on the priority list.
Deputy Prime Minister Ali Babacan, who is in charge of the economy, pledged the required structural reforms, a key issue for foreign investors, will be sped up in a bid to prop up growth.
