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Fitch slightly upgrades Turkey’s growth forecast

Fitch has upgraded Turkey’s growth forecast for this year due to a better-than-expected economic performance, according to a senior director at the ratings agency.

Speaking on Dec. 9, Fitch Ratings Senior Director Paul Rawkins said Fitch had raised Turkey’s 2014 growth forecast from 2.7 percent to 3 percent because of the country’s current economic performance, which is moderately higher than expected.

Rawkins noted this performance is also likely to be affected positively by a drop in oil prices over the forthcoming period.

“We pushed up [the growth forecast] a little bit. The outcome became a bit a better than we expected, actually. [The] economy got momentum and … I think the last part is going to be helped by lower oil prices, which would ease things,” Rawkins said.

Explaining that Turkey’s current account deficit will be smaller than their first estimates, Rawkins said the declining oil prices will further help decrease the shortfall.

“The current account deficit is not going to be as large as we initially thought. Those are the factors which lend support to the positive side. Oil prices coming down will take some of the pressure on the current account deficit. That has quite an effect on growth,” he said.

Fitch forecasts Turkey to grow by 3.3 percent in 2015 and 4 percent in 2016, Rawkins noted. The agency has forecast inflation in Turkey to reach 8.2 percent at the end of this year and abate to 7 percent in 2015 and 5.8 percent in 2016.