The International Monetary Fund raised its growth forecast for Turkey’s economy amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks.
Gross domestic product in Turkey is expected to expand by about 6% in 2021, the IMF said in statement after concluding its Article IV mission. The fund previously forecast 5% growth.
Elevated external financing needs, declining reserves, high inflation and increasing dollarization “set Turkey apart from many of its emerging market peers,” the Washington-based lender said. It welcomed the pivot to tighter monetary policy under the new economic management.
“A firm monetary policy stance should be maintained, with further measured monetary policy tightening likely needed should inflation expectations fail to stabilize,” it said.
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