The World Bank does not expect recession in Turkey, the bank’s top economist said on Wednesday. Yet, growth will slow down substantially between 2018-2019.
“We have looked at what happened when there is a sharp currency depreciation, so we have put together whole data base of years and countries, which depreciation was 30 percent or more than the previous year,” Franziska Ohnsorge, manager of the World Bank’s Development Economic Prospects Group, told Anadolu Agency.
“It is interesting, it does not necessarily cause recession,” she said.
Ohnsorge said, “A sharp depreciation is something very different than a recession. Our forecast [for Turkey] is predicated on that.”
“What we are forecasting is that Turkey does not differ that much from those other countries which had sharp depreciation over the 30-40 years,” she stressed.
Ohnsorge noted that Turkey’s growth is expected to slow down this year predominantly on downside risks, and said: “We have seen a slow recovery. Recovery means 1.6 percent growth in 2019.”
“This is in line with what happened in the countries with sharp depreciation. It is a huge data set. In the data set we have Turkey 2001 [financial crisis] as well,” she underlined, adding: “But we take the average of all these past events in 30-40 years.”
“Net exports will continue to be strong in Turkey. Even if the Euro area slows down a bit, depreciation [of the currency] has helped exports. We do expect Turkey’s export growth to be strong,” said Ohnsorge.
The World Bank expects Turkey to post 1.6 percent growth in 2019, 3.0 percent in 2020 and 4.2 percent in 2021, according to the latest Global Economic Prospects report released on Tuesday.
Turkey’s exports hit an all-time high with $168.1 billion last year, according to the country’s trade minister on Friday.