International Monetary Fund raises Turkey's 2021 GDP growth forecast to 6%

Andrew Cummings
January 26, 2021

This was an answer to Ahram Online's question on the IMF's projections for the MENA region's economic growth in 2021 and 2022 during the press conference the International Monetary Fund held on Tuesday to release its world economic update report.

The International Monetary Fund on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be nearly a full percentage point less severe than expected.

It predicted global growth of 5.5 per cent in 2021, an increase of 0.3 percentage points from the October forecast, citing expectations of a vaccine-powered uptick later in the year and added policy support in the United States, Japan and a few other large economies.

In emerging markets and developing economies, inflation is projected at just over 4 percent, which is lower than the historical average of the group, according to the report. This is also lower than the earlier projection of 7.4 percent. The fund now projects 2021 economic growth at 3.1 percent compared with 2.3 percent previously. The UK suffered one of the sharpest downgrades among advanced economies, behind only Canada and Spain.

Brexit disruption in the first quarter this year is also likely to reduce output by around 1 per cent, according to the updated World Economic Outlook.

Gopinath, however, said that the positive effects are partially offset by a somewhat worse outlook for the very near term as measures to contain the spread of the virus dampen activity.

Much now depends on the outcome of this "race" between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens, IMF Chief Economist Gita Gopinath said at a virtual press briefing.

"IMF revises up forecast for U.S. growth to 5.1% in 2021 from October forecast of 3.1%, sees 2.5% growth in 2022 vs. 2.9% in October".

The IMF gave India a big upgrade, thanks to a faster-than-expected recovery at its factories and farms.

The IMF report suggested that India will be the only major economy to register a double-digit growth this year, followed by China, which is expected to grow by 8.1% in 2021.

While the 2021 and 2022 growth projections are above the world growth estimates and the forecasts for the Asean-5-which is at 5.2 percent in 2021 and 6 percent for 2022-they are still below the government's growth projections for both years.

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