International credit rating agency S&P Global published its "Economic Outlook Emerging Markets Q4 2023" report on September 25. According to S&P, most emerging markets are expected to grow below trend through the rest of 2023 and into 2024. The agency has increased its growth forecast for emerging markets excluding China by 0.2 points to 3.5 percent for 2023 and lowered it by 0.1 point to 3.9 percent for 2024. Meanwhile, S&P has lowered its growth forecast for China to 4.8 percent in 2023 and 4.4 percent in 2024, due to the persistent weakness in the property sector and lower consumer confidence.
According to S&P, although domestic demand in most emerging markets is still strong, tight monetary policy is expected to have a severe impact on the coming quarters. "Weak demand from the USA, Europe and China means weak exports from most developing economies in 2024," the report said, adding that high-interest rates amid the lack of higher growth prospects will put pressure on investments in developing countries. Although inflation continues to slow down in most developing countries, it is more likely to record a fluctuating trend in the coming quarters, the report said. Noting that, although median inflation in emerging countries reached 5.3 percent, after peaking at 8.2 percent annually in last August, upward pressure on energy prices is expected to ease the pace of disinflation in the coming months.
As for Turkey, S&P has increased its 2023 gross domestic product (GDP) growth rate forecast for Turkey by 1.2 points to 3.5 percent, based on the higher-than-expected rise in the country's second quarter GDP. The GDP growth expectation for 2024 has increased by 0.3 points to 2.3 percent and the growth estimates for 2025 and 2026 stand at 2.9 percent, decreasing by 0.2 points each. S&P also included annual average dollar exchange rate estimates for Turkey in its report, with the US dollar-Turkish lira exchange rate expected to be 24.7 on average in 2023, 35 in 2024, 41.3 in 2025 and 42.6 in 2026.