Turkey (Real GDP, yoy %)
201920202021
Consensus (median)443.6
High estimate65.93.6
Low estimate2.53.33.6
Standard Deviation0.80.80
Count of Estimates43151
[Negative]

After rapid increase in real GDP at the end of 2017 (+3.3% in 2016 vs +7.3% in 2017), supported by government stimulus measures and credit guarantees, as well as political pressure on banks to provide a loans and improved export competitiveness, I expect that in 2018 the Turkey's economic growth will slow down to 4%. This slowdown will reflect the impact of tax boost, higher interest rates, tightening of global liquidity against the backdrop of weaker Turkish Lira, increased inherent instability and higher inflation. As a result all planned government measures to increase employment and investment, will be fully blocked by these negative factors. In addition, foreign capital inflows will be offset by political instability in line with the transition to a presidential system of government, domestic financial vulnerability and lower interest rate in comparison with the developed economies.

[Positive]

As emerging economy Turkey offers the best investment case in terms of growth and downside risk in oil-linked shares. Due to positive dynamic in world oil prices as I estimate to be limited to 70 USD per barrel for 2018 year

[Positive]

Turkey offers a good growth potential in terms of GDP for the next two years 2018-2019 with the real rate 5% as a minimum. This is driven by governmental fiscal stimulus and the increase of export. And I read many analysts bet on strong growth dynamics of Turkish economy. Main factors are oil price growth (export), internal consumption strengthening and attraction of new foreign investments, these drivers seem to continue feeding up the economy growth, although the increase might slow down to more moderate levels in mid-term. The growth in internal consumption is also base on the clear reduction dynamic of unemployment rate. Also, many tourists are coming back (e.g. from Russia) which makes businesses to be more optimistic for near future