According to an economist for the European Bank for Reconstruction and Development (EBRD), unlike many of its neighbours, Turkey has emerged from the global economic crisis stronger than before. The EBRD sees great potential in Turkey, even though its prediction for growth this year is lower than that of the Turkish government.
The EBRD expects Turkey’s growth for 2012 to reach 2.5%, while the Turkish government is predicting a growth of 4.5%. In spite of Turkey’s strong growth, the country hasn’t been immune from the effects of the Eurozone crisis as it has affected imports and exports, and the EBRD does expect to see a slowdown in domestic demand this year, and loans provided to the private sector this year have declined.
The EBRD is expecting this slowdown in growth due to a combination of global and domestic factors, but is still predicting the Turkish economy will expand this year. Last year Turkey experienced higher-than-expected inflation, but since October last year the Turkish government has tightened the country’s monetary policy to control inflation, and the central bank has a reputation of being highly successful in meeting expectations and demands.
The EBRD has been investing in Turkey for three years now, and still believes there is huge potential for Turkish companies to improve export figures. The bank feels Turkey needs to become more competitive and must diversify its exports market in order to bring down its current-account deficits.
However the EBRD points out that Turkey’s spectacular economic growth during the past few years isn’t something to be ignored, and that Europe needs to take note. The EBRD is due to open a new office in Ankara at the end of this month, and has invested more than €1.5 billion in the country in over 50 projects since 2009.