In its most recent report on Turkey, the International Monetary Fund (IMF) stated that Turkey's economy had picked up strongly in 2017, following the coup attempt in 2016. IMF released its “Article 4” consultation report on Turkey in which it also mentioned Turkey’s economy was suffering excessive heat and facing internal and external imbalances causing the inflation to remain higher than the target. This is not to forget that despite political uncertainties and regional imbalances it had to cope with, Turkey managed to achieve an extraordinary growth of 7.4 percent in 2017.
IMF also mentioned that Turkey should convert the strong growth performance of 7.4 percent it achieved in 2017 to an opportunity to overcome the current account deficit and disparities in inflation in the first place.
Based on routine reviews of the performance achieved by member countries, the reports shares the economic growth has accelerated by loosening macro precautionary measures.
Forecasting a growth of 4.5 percent this year, IMF says that the growth in commercial loans has slowed down and added that said growth which had accelerated due to credit guarantee fund had returned to its normal level since the end of 2017.
It is also mentioned in the report that the non-performing loans of the banks are kept at low rates but decline in quality of loans is observed and this should be attended to.
"While the growth rate in 2018 is expected to fall to 4.5 percent, inflation remains well above the target, and the current account deficit is expected to remain high," the IMF said.
Stating that the economy has proved to be resistant to risks such as “high level of external financing need, low foreign exchange reserves, investors' tendency to leave emerging markets, internal and external geopolitical risks” until today, the IMF emphasizes that the economic policy must focus on eliminating the imbalances and struggle with inflation in order for the growth to continue in the future.
