How much will it grow in 2024? IMF announces Turkey's growth forecast

The International Monetary Fund (IMF) has raised its global economic growth forecast for this year from 3.1 percent to 3.2 percent.

The IMF published the April edition of its World Economic Outlook Report under the title "Steady but Slow: Resilience amid Divergence."

The report stated that economic activity has been surprisingly resilient despite the global disinflation in 2022-2023, and that while global inflation has retreated from its peak in mid-2022, "economic activity has grown steadily, defying warnings of stagflation and global recession."

The report pointed out that growth in employment and income has followed a steady course, noting that this reflects a supply-side expansion amid supportive demand developments, including higher-than-expected government spending and household consumption, as well as an unexpected increase in labor force participation.

Stating that inflation is approaching target levels and that central banks in many economies are moving toward policy easing, the report expressed that fiscal policies aimed at curbing high public debt through higher taxes and reduced government spending are expected to put pressure on growth.

GROWTH PROJECTION

The report emphasized that the world economy grew by 3.2 percent last year and is projected to continue at the same pace in 2024 and 2025. It noted that the growth forecast for this year was revised upward by 0.1 percentage points compared to the forecast published in January, rising from 3.1 percent to 3.2 percent, while the forecast for next year was kept constant at 3.2 percent.

Pointing out that the pace of growth is low by historical standards, the report stated that this is due to both short-term factors, such as still-high borrowing costs and the withdrawal of fiscal support, and long-term factors, such as the effects of the COVID-19 pandemic and Russia's war in Ukraine, weak productivity growth, and increasing geoeconomic fragmentation.

RISKS TO THE GLOBAL OUTLOOK ARE NOW GENERALLY BALANCED

The report stated that global headline inflation is expected to fall from an annual average of 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, and it is projected that advanced economies will reach their inflation targets earlier than emerging market and developing economies.

Noting that the global economic growth forecast for five years from now is at its lowest level in recent years at 3.1 percent, the report included the assessment that the slowing pace of reaching higher living standards in middle- and low-income countries indicates that global economic inequalities persist.

The report warned that risks to the global outlook are now generally balanced, and that new price spikes stemming from geopolitical tensions, including the war in Ukraine and conflicts in Gaza and Israel, could increase interest rate expectations and lower asset prices alongside persistent core inflation in an environment where labor markets remain tight.

Pointing out that differences in the speed of fighting inflation among major economies could lead to currency movements that put pressure on financial sectors, the report stated that in China, growth could stall if there is no comprehensive intervention in the troubled real estate sector, which could harm trading partners.

TURKISH ECONOMY GROWTH FORECASTS KEPT CONSTANT

In the report, which also shared countries' economic growth forecasts, the growth forecasts for the Turkish economy for this year and next year were not changed.

In the IMF report, where the Turkish economy is expected to grow by 3.1 percent this year and 3.2 percent next year, it is projected that economic activity will strengthen in the second half of 2024 as monetary tightening ends and consumption begins to recover.

The inflation forecast was stated as 59.5 percent for this year and 38.4 percent for next year, while it was reported that the unemployment rate in the country is expected to be 9.6 percent this year and next year.

US GROWTH FORECAST RAISED, EURO AREA'S LOWERED

In the report, where the growth expectation for the US economy was raised from 2.1 percent to 2.7 percent for 2024, it was stated that the country's growth forecast for next year was increased from 1.7 percent to 1.9 percent.

The report noted that the growth forecast for the Euro Area economy was lowered from 0.9 percent to 0.8 percent for this year and from 1.7 percent to 1.5 percent for 2025.

Stating that the growth forecast for Germany, one of Europe's leading economies, was lowered from 0.5 percent to 0.2 percent for this year and from 1.6 percent to 1.3 percent for next year, the report noted that the growth expectation for the French economy was lowered from 1 percent to 0.7 percent for this year and from 1.7 percent to 1.4 percent for next year.

In the report, the growth forecast for the Italian economy was maintained at 0.7 percent for 2024, while it was lowered from 1.1 percent to 0.7 percent for next year.

Stating that the growth forecast for the Spanish economy was increased from 1.5 percent to 1.9 percent for this year while kept constant at 2.1 percent for next year, the report noted that the growth expectation for the UK economy was also lowered from 0.6 percent to 0.5 percent for this year and from 1.6 percent to 1.5 percent for next year.

CHINA'S GROWTH EXPECTATION KEPT CONSTANT

The report stated that in the emerging markets and developing economies group, the growth expectation for the Chinese economy was maintained at 4.6 percent for this year and 4.1 percent for next year.

Stating that the growth expectation for the Indian economy for this year was raised from 6.5 percent to 6.8 percent, the report noted that the country's growth forecast for next year was kept constant at 6.5 percent.

The report stated that the growth forecast for the Russian economy was raised from 2.6 percent to 3.2 percent for this year and from 1.1 percent to 1.8 percent for next year.

News Source: 12punto