(Bloomberg) -- Turkey's economy will expand more than previously expected in 2017, thanks to strong government and consumer spending, according to a new Bloomberg survey.
Economists boosted their forecasts for the sixth month in a row and expect gross domestic product to grow 4.1 percent this year compared with 3.9 percent previously. The economy grew 5 percent in the first quarter compared to a year earlier, beating all estimates, as the government rolled out record breaking stimulus measures to help growth.
Last month, Turkey's central bank kept all its main interest rates unchanged and said it would keep policy tight until the outlook for consumer inflation improves. Economists maintained their inflation forecasts across the board this month and continue to see consumer prices averaging 10.4 percent this year and ending the year at 9.4 percent.
Key Takeaways
- Survey of 34 economists conducted from Aug. 25 to Aug. 30
- Economy will expand 3.2% in 2018 and 3.5% in 2019, largely unchanged from previous
- Chance of a recession happening over the next 12 months is 10 percent, according to 6 respondents
- Q3 2017 GDP forecast at +5.3% y/y versus prior survey +3.9%
- Q4 2017 GDP forecast at +3.3% y/y versus prior survey +3.2%
- End-2017 CPI forecast unchanged at +9.4% y/y versus prior survey
- End-2018 CPI forecast unchanged at +8% y/y versus prior survey
- Turkey 1 week repo rate seen at 8.00% by end-4Q17, current rate is 8.00%
- See graph of GDP forecasts
- See graph of Turkey's recession probability
Source Comment
“Economic growth will be strong enough, thanks to government's sectoral stimulus which contributed to domestic demand,” wrote Enver Erkan, an analyst at Reel Kapital Securities in Istanbul, “Also, the contribution of European economies' recovery will be positive via the net exports channel. We expect inflation to remain in double digits until the end of the year and decline to 9.4 percent in December through the base effect.”
Full Survey Results
2Q 3Q 4Q 1Q 2Q 3Q 4Q Avg. Avg. Avg. 2017 2017 2017 2018 2018 2018 2018 2017 2018 2019 GDP YOY% 4.6% 5.3% 3.3% 3.9% 4.0% 4.4% 4.1% 4.1% 3.2% 3.5% Previous survey 4.8% 3.9% 3.2% 3.8% 4.0% 4.4% 4.2% 3.9% 3.2% 3.6% Private Cons. YOY% 4.9% 4.8% 3.1% 4.0% 4.5% 3.7% 4.0% 4.4% 3.5% 3.6% Previous survey 5.0% 4.7% 3.3% 4.0% 4.5% 4.1% 4.3% 4.3% 3.6% 3.8% Gross Fixed Inv. YOY% 2.3% 2.5% 1.5% 2.7% 3.0% 2.9% 2.9% 2.4% 2.7% 2.5% Previous survey 2.2% 2.5% 1.3% 2.7% 2.6% 3.2% 2.8% 2.1% 2.5% 2.5% Avg. CPI YOY% n/a 10.3% 9.9% 8.0% 7.5% 8.5% 8.5% 10.6% 8.1% 7.9% Previous survey n/a 10.4% 9.9% 8.4% 7.7% 8.2% 8.3% 10.6% 8.1% 7.9% Year-End CPI YOY% n/a n/a n/a n/a n/a n/a n/a 9.4% 8.0% 7.2% Previous survey n/a n/a n/a n/a n/a n/a n/a 9.4% 8.0% 7.5% PPI YOY% n/a 15.3% 13.0% 7.4% 8.3% 9.1% 9.0% 14.7% 8.5% 7.8% Previous survey n/a 14.8% 12.4% 6.9% 7.7% 9.1% 9.0% 14.4% 8.2% 7.8% IP YOY% n/a 6.0% 0.4% 2.7% 2.6% 3.8% 4.1% 3.2% 2.8% 2.8% Previous survey 3.9% 5.7% 3.3% 2.4% 2.6% 4.1% 4.3% 3.4% 3.0% 3.2% Unemployment rate 10.5% 10.9% 11.7% 11.7% 10.5% 10.8% 11.2% 11.3% 10.9% 10.6% Previous survey 10.5% 10.8% 11.4% 11.5% 10.5% 10.6% 11.4% 11.5% 10.8% 10.6% Current Acct. % GDP -4.0% -4.1% -4.7% -4.6% -4.4% -4.5% -4.4% -4.4% -4.5% -4.7% Previous survey -4.0% -4.1% -4.7% -4.6% -4.4% -4.5% -4.1% -4.5% -4.5% -4.7% Budget as a % GDP n/a n/a n/a n/a n/a n/a n/a -2.8% -2.4% -2.2% Previous survey n/a n/a n/a n/a n/a n/a n/a -2.7% -2.3% -2.1% 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2017 2017 2018 2018 2018 2018 2019 2019 2019 Repo Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% Previous survey 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 3-mo. TRLibor 12.73% 11.90% 11.90% 12.53% 12.38% 11.73% 12.00% 11.75% 11.75% Previous survey 12.40% 11.75% 11.90% 12.52% 12.33% 10.90% 12.00% 11.75% 10.88% 2-Year Note 11.44% 11.05% 10.50% 10.32% 10.05% 9.79% 10.00% 9.25% 9.13% Previous survey 10.90% 10.88% 10.41% 10.22% 9.84% 9.00% 8.88% 8.75% 8.63% 10-Year Bond 10.73% 10.50% 10.46% 10.25% 10.13% 9.99% 9.97% 9.93% 9.90% Previous survey 10.73% 10.75% 10.65% 10.90% 10.60% 10.30% 10.64% 10.62% 10.10% NOTE: All figures are expressed as of the end of the quarter except for GDP.
For custom economic forecast consensus: XLTP XCEF
To contact the reporter on this story: Joshua Robinson in Amsterdam at jrobinson37@bloomberg.net.
To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net.
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