The Fund just released its Turkey forecasts: On the growth side, the 5.1% contraction in 2009 and 1.5% growth of are not really far off from my own projections of -5% this year and 2-3% the next, which I have been sharing in my weekly Hurriyet columns since end-November (see Monday's piece for a detailed discussion). Given that I no longer remain the maverick I was when I first made these bold forecasts, I do not see why one daily calls these projections shocking: Many respectable economists see growth around these parameters at the moment.
The Fund sees inflation at 6.9% this year and 6.8% the next, which is only a little bit more optimistic than my own scenario of 7-7.5% inflation at year-end. But note that I, as many other economists, expect inflation to fall rapidly in the next few months because of base effects, hitting near or even below 6% in the summer. However, while most economists expect inflation to stay there, I foresee a gradual climb back to 7% territory, and I guess so does the IMF. So the issue is one of the alphabet, whether inflation will be an L, as in the consensus and CBT view, or a V, as in my minority view.
There Fund also released its current account forecasts, which at 1.2% and 1.6% of GDP this year and the next, are more or less in line with the consensus view. In any case, we are way past the days when current account used to be the single most important statistic in Turkey, so for current account, I'd say "who gives a heck?".
As much as we Turks want to world to revolve around us, the Fund also released forecasts of other countries, which you can read in prestigious papers like WSJ and FT tomorrow, so I won't delve into those. But here's a quick discussion if you can't wait until tomorrow, and a one-sentence summary would be "all growth forecasts are revised down". One interesting peculiarity is the Fund's German growth expectation of 5.6%, which confirms my really scientific analysis of the German economy I had offered a trio working on a Turkey report a few weeks ago: "Germany is f---ed". Now, unless Turkish exporters are extremely deft at switching markets, a sharp rebound in exports should not be expected not only this year, with Europe and especially Germany in the sorry state they are in, but also the next- this was the point I was trying to make in my latest Hurriyet column when I said I found a huge contribution to growth from net exports next year somewhat unrealistic.
All in all, since these were released late in the day, I will have wait a couple of days until I see what market economists and columnists think of these figures.
The Fund sees inflation at 6.9% this year and 6.8% the next, which is only a little bit more optimistic than my own scenario of 7-7.5% inflation at year-end. But note that I, as many other economists, expect inflation to fall rapidly in the next few months because of base effects, hitting near or even below 6% in the summer. However, while most economists expect inflation to stay there, I foresee a gradual climb back to 7% territory, and I guess so does the IMF. So the issue is one of the alphabet, whether inflation will be an L, as in the consensus and CBT view, or a V, as in my minority view.
There Fund also released its current account forecasts, which at 1.2% and 1.6% of GDP this year and the next, are more or less in line with the consensus view. In any case, we are way past the days when current account used to be the single most important statistic in Turkey, so for current account, I'd say "who gives a heck?".
As much as we Turks want to world to revolve around us, the Fund also released forecasts of other countries, which you can read in prestigious papers like WSJ and FT tomorrow, so I won't delve into those. But here's a quick discussion if you can't wait until tomorrow, and a one-sentence summary would be "all growth forecasts are revised down". One interesting peculiarity is the Fund's German growth expectation of 5.6%, which confirms my really scientific analysis of the German economy I had offered a trio working on a Turkey report a few weeks ago: "Germany is f---ed". Now, unless Turkish exporters are extremely deft at switching markets, a sharp rebound in exports should not be expected not only this year, with Europe and especially Germany in the sorry state they are in, but also the next- this was the point I was trying to make in my latest Hurriyet column when I said I found a huge contribution to growth from net exports next year somewhat unrealistic.
All in all, since these were released late in the day, I will have wait a couple of days until I see what market economists and columnists think of these figures.
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