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World Bank revises Turkey’s 2020 growth forecast

World Bank revises Turkey’s 2020 growth forecast

The World Bank increased Turkey‘s gross domestic product (GDP) projection for 2020, according to its Global Economic Prospects report released Tuesday.

The international financial institution estimates that the Turkish economy grew 0.5% in 2020, up from an estimated 3.8% contraction in June, “amid a substantial expansion in credit,” the report said.

Turkey is forecast to see its GDP grow 4.5% in 2021, down from previous expectations of a 5% increase.

“The outlook has been downgraded as the sharp acceleration in new COVID-19 cases, weaker than-expected international tourism, and tighter than-anticipated monetary policy weigh on the recovery,” the report said.

It is estimated to see 5% growth in 2022.

“Despite hikes in the policy interest rate, the lira hit new lows against the US dollar, which eroded balance sheets and limited the space available for additional countercyclical policy responses,” it said.