In its global economic outlook for September, international credit ratings agency Fitch Ratings has stated that, with GDP data showing that the second quarter of the current year was weaker than expected and amid continued uncertainty after the coup attempt in July, it has again revised down its forecasts for Turkish growth. Accordingly, Fitch has downgraded its forecasts for Turkish growth from 3.4 percent to 3.0 percent for the current year. Fitch forecasts the Turkish economy will grow by 3.2 percent in 2017 and 3.5 percent in 2018.
According to Fitch’s statement, after the coup attempt in Turkey, the ongoing suspension of employees from the public sector will prolong near-term uncertainty, which will hit consumption and investment will also be affected by short-term political considerations and longer-term wariness about the political environment for structural reform.
For the global markets, Fitch stated that the global financial markets have shrugged off earlier concerns about the implications of Brexit, but the growth outlook for the advanced economies and the risks surrounding it have deteriorated in recent months. More importantly, downside risks to growth have increased across the advanced economies as the risks of political shocks affecting investment have risen and as concerns have grown about the capacity of central banks to counter adverse shocks. These risks have the potential to diminish the benefits to the world economy of a stabilizing growth picture in the largest emerging markets after a tough couple of years.