Moody’s raises Turkey’s growth forecast for 2021

Wednesday, 01 September 2021 17:38:20 (GMT+3)   |   Istanbul

International credit rating agency Moody’s has stated in its global macroeconomic outlook report 2021-22 that the global growth rebound has strengthened, but noted that the spread of the delta variant of the coronavirus poses risks.

According to the report, the global economic outlook continues to evolve unevenly, with major G-20 economies at different stages of their expansionary cycles amid different degrees of success in combating successive waves of soaring coronavirus infections. Vaccination rates, the extent of serious infections and mobility restrictions remain the key determinants of where countries are in their expansionary cycle. Moody’s estimates that G-20 economies will grow by 6.2 percent in 2021, after a 3.2 percent contraction last year, followed by 4.5 percent growth in 2022. G-20 advanced economies will grow by 5.6 percent in 2021 and by 4.2 percent in 2022, while emerging economies will expand by 7.2 percent in 2021 and slow to 5.1 percent growth in 2022.

As for Turkey, Moody’s expects the country’s real GDP to grow around six percent this year, with the support of the global economic rebound, the recovery in Turkey’s tourism sector due to vaccination progress, and the continuing effect of last year’s strong credit growth. Moody’s forecast that the Turkish economy would grow five percent in 2021 in its report published in May. The rating agency expects Turkey’s economic growth to slow to around 3.6 percent in 2022, compared to 3.5 percent forecasted in the previous report, assuming that the government will not push for strong credit growth again, given the already high levels of corporate and bank debt and the risk of further market volatility and currency pressure.

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