Turkey’s strong recovery in the economy pushed foreign institutions to revise periodically.
There is an experience of a sharp positive change in the pessimistic view of the foreign institutions for Turkey. During the pandemic period, when the industry recovered steadily, the decisions of foreigners also evolved exactly the positive. Some estimates of the institutions related to Turkey’s economy have been revised almost 5-6 times. Most of the institutions, that predicted a reduction of up to 5 percent for the 2020 GDP at the beginning of the pandemic, changed their estimations to positive at the end of the year. Following the IMF and World Bank, institutions such as HSBC, Commerzbank and JP Morgan had predicted recession for Turkey, now makes positive statements on Turkey’s economy.
Some organizations revised their predictions more than twice. After a 9 percent increase in December in industrial production announced on Friday, JP Morgan raised its 2020 growth forecast from 1.1 percent to 1.9 percent, and HSBC from 1 percent to 2 percent. Commerzbank also updated its 2021 forecasts. The Bank shifted its 2021 growth forecast for Turkey from 5.8 percent to 6.5.
Institutions said “technical development” as justification
HSBC had predicted a 5 percent contraction in April, when the pandemic peaked, and updated this forecast to – 3.1 % in September. HSBC also stated that while increasing its growth forecast for 2021 from 2.1 percent to 4.2 percent, it was “technical development” as the justification. JP Morgan predicted a 2.2 percent contraction for 2020 at the beginning of the epidemic, then converted it to 1.1 positive growth. Now, JP Morgan recently increased its 2020 forecast from 1.1 percent to 1.9 percent and its 2021 forecast from 3.3 percent to 4.6 percent.
The IMF and World Bank revised too
International Monetary Fund (IMF) and the World Bank has revised the growth forecasts for Turkey. The World Bank, which foresaw a 3.8 percent contraction in the June report, increased this estimation to 0.5 percent. The IMF insists on that decision until January 26 but inevitably “Turkey will grow positive,” due to the fast recovery in Turkey’s economy.