The IMF’s recently published “World Economic Outlook” contained some both pleasing and concerning details. The economic growth, which was projected as 4% for Turkey this year in July, was increased to 5%, which is good news, but the growth expectation for 2023 has been downgraded from 3.5% to 3.0%.
Unfortunately, inflation expectations are not in line with the MTP targets announced by the government. The IMF seems to have increased its CPI estimate for 2022 from 52.4% to 73.5% and from 29.7% to 36.9% for the next year. The World Bank, on the other hand, has a higher expectation for 2023.
Turkey Current Account to GDP was maintained as -5.7% for this year, but the expectation for the next year was increased from -2.0% to -3.9%, which goes to show that it will not be easy to bring the exchange rates under control.
“The Situation Does Not Seem Very Promising…”
Interestingly, under the current circumstances, the IMF seems to have pushed its jobless rate expectations to a positive direction, revising them from 11.3% to 10.8% for this year, and from 10.6% to 10.5% for 2023.
The IMF listed his global expectations as follows: The global economic growth forecast for this year was maintained at 3.2%, for 2023, it was reduced from 2.9% to 2.7%, along with a warning: “We have not seen the worst yet”. Meanwhile, the US 2022 growth estimate has dropped from 2.3% to 1.6%, which is not good news, while inflation expectations reached a higher level compared to the July.
It is obvious that Turkey will also have difficulties amidst a global economic slowdown. To help get through this process with the least damage, funds need to be generated for businesses as well, just like it was done for artisans and craftspeople.