“The growth figure in Q2 outpaced our expectations and therefore we had to revise our projections,” Lewis said during a pres conference on presenting the updated version of the “World Global Outlook” report. “Our expectations are revised based on many factors, such as the macroeconomic environment in a country, the inflation and the current account deficit [CAD]. We expect that the Turkish economy will grow by 7.5 percent by the end of this year while it will slow down to 2.5 percent by 2012.” The IMF projected that Turkey would grow by 6.5 percent and 2.25 in 2011 and 2012, respectively, in a previous report.
With the Justice and Development Party (AK Party) in power, Turkey has made significant progress over the last seven to eight years. Despite a contraction of 4.8 percent in 2009, the country clinched a 8.9 percent growth in 2010, became the fastest growing country in the world with 11 percent in this year's Q1 and achieved a 8.8 percent growth in the April-June period of this year. Moreover, according to Deputy Governor Erdem Başçı, the central bank took several measures to slow down the overheating economy and widening CAD. International rating agency Standard & Poor's applauded Turkey's noteworthy economic performance by raising its local-currency sovereign credit rating by two notches to BBB-, or investment-grade level on Tuesday.
On a question whether the IMF is making a negative projection for Turkey's future growth figures, Lewis said their growth expectations should not be seen as negative. “A fall from 7.5 percent to 2.5 in 2012 is a reasonable slowdown. This means that Turkey will have soft-landing,” Lewis respondent to the question.
The IMF report suggests that the global rate of growth will fall to 4 percent both this year and in 2012. The rate was 5 percent in the past year. Moreover, the report also underlined that the average growth rate of developed economies would be 1.6 percent, meaning that emerging countries would be driving force behind a 4 percent growth figure by the end of this year.
Separately, John Christopher Bluedorn, an IMF economist, touched upon the recent developments in the US and the EU, and said that a global financial recovery is progressing slowly and has not derailed yet. “It [the recovery] is slower than that we expected and the debt crisis in the eurozone is not uncontrollable. We do not see any risk that this crisis will spill over to other regions,” Bluedorn stated at the IMF meeting on Friday. Another IMF economist, Daniel Leigh, said the turmoil in the financial markets has lead to a rise in pessimism among investors but added that it is not as bad during the bankruptcy of investment bank Lehman Brothers in 2008.
