The International Monetary Fund (IMF) announced in a report on Sept. 23 that it did not expect Turkey to go into recession in 2019. The IMF predicted positive growth this year at roughly 0.25%, it said in a concluding statement of the 2019 Article IV Mission after monitoring of economic developments in the country. “Buoyed by expansionary fiscal policy, rapid state bank credit provision, a strong contribution of net exports, and more favorable market sentiment, the economy registered positive growth in the first half of 2019,” it said. Current positive market sentiment provides “good opportunity” to enact a set of reforms that would address vulnerabilities, strengthen policy credibility and set the economy on a higher and more sustainable growth path, it added. The report also stressed that the lira had recovered and that the current account had seen remarkable adjustment following a sharp depreciation in the currency in late 2018. Import compression, a strong tourism season, improved market sentiment and geopolitical developments have taken pressure off the lira, according to the statement. Clearer monetary and intervention policy would further boost credibility, it highlighted. Underlining that inflation could drop to single digits over the coming months, it said: “High real policy rates, lira stability, favorable base effects, and resulting lower inflation have allowed the CBRT [Central Bank of the Republic of Turkey] to cut policy rates.” Turkey is looking forward to the forthcoming New Economic Program (NEP), which should clearly diagnose the challenges facing the economy and outline a comprehensive set of policies to address them, it added. Turkey’s new economic program, announced in September 2018, targets a current-account-deficit-to-GDP ratio this year of 3.3%. Concluding statement of the 2019 Article IV Mission is presented to the IMF Board of Directors for approval in Washington.
Hurriyet Daily News