The Turkish government’s economy masters admit Turkey will miss its 4 percent growth target for 2012. However, the global atmosphere is gloomier with the IMF planning to cut its projection on world data
Turkey has unofficially pulled its 2012 growth forecast down to between 3 and 4 percent, according to fresh statements by both Cabinet ministers and the Central Bank governor.
The news comes at a time when the International Monetary Fund prepares to cut its global forecast dramatically and the World Trade Organization revises its global trade growth forecast sharply.
The Turkish economy will grow slightly over 3 percent, Finance Minister Mehmet Şimşek said in an interview broadcast on CNN International.
The minister is optimistic about fourth-quarter growth in particular.
Central Bank Gov. Erdem Başçı also said in an interview published in Japan’s daily Nikkei that the benchmark figure would land between 3 and 4 percent. The government’s efforts to slow down the economy resulted in it missing the 4 percent target in the official medium-term program, Başçı added.
Turkey’s potential growth rate was measured at 5 percent, Başçı said, adding that price stability and financial stability were vital to materializing this potential. Deputy Prime Minister Ali Babacan also said earlier that the economy might miss the growth target by 1 percent.
Euro crisis hits world economic growth
Global outlook is more pessimistic with the ongoing euro crisis, which hinders the leading exports market of Turkey. The IMF will lower its growth forecasts for the global economy next month, an official of the group said Sept. 20.
“The global economy has weakened. We are shaving off our forecast for global growth by a few decimal points,” Hoe Ee Khor, assistant director of the IMF’s Asia and Pacific Department, said in a conference call on South Korea’s economy.
In its latest estimates, the Washington-based global lender projected a global growth of 3.5 percent in 2012 and 3.9 percent in 2013.
It is slated to unveil new forecasts on Oct. 9 at the annual IMF and World Bank meetings in Tokyo.
“We expect the global economy to recover gradually over the next year,” said Khor, the IMF mission chief for South Korea.
World trade will grow by a mere 2.5 percent this year, dragged down by Europe to less than half of the previous 20-year average, the WTO said Sept. 21.
The WTO cut its estimate from a 2012 growth forecast of 3.7 percent it made in April and also lowered its forecast for 2013 to 4.5 percent growth from 5.6 percent.
“I see the risk more on the downside than the upside,” WTO Director General Pascal Lamy said at a news conference in Singapore. “What could be surprising is that you have a volume of trade that is lower than world [economic] growth.”
The WTO figures are based on a world economic growth of 2.1 percent in 2012 and 2.4 percent 2013, which it said was a consensus estimate of economic forecasts.
“The main reason for the growth slowdown is of course Europe,” said Lamy, who will step down next year as head of the 157-member group that has so far failed to agree on major reforms of global trade rules.
We also know U.S. growth is lower than expected, [and] Japan is not in great shape,” Lamy said.