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Turkey Projects 7% Growth for Q1 2022

Turkey Projects 7% Growth for Q1 2022

Tuesday, 31 May, 2022 - 09:30
Turkey's Treasury and Finance Minister Nureddin Nebati says annual growth will be around seven percent in the first quarter of 2022 (DPA)

The Turkish economy's solid and balanced growth trend and the pioneering data point out that annual growth will be around seven percent in the first quarter of 2022, Treasury and Finance Minister Nureddin Nebati said Monday.

Speaking at the General Assembly of the Banks Association of Turkey (TBB), Nebati said the strong structure of the banking sector has a system that is very resistant to shocks, noting the annual inflation rate rose to 70 percent last April and is expected to remain high until the end of the year.

Last week, the Turkish Central Bank kept the key interest rate for the fifth consecutive month at 14 percent, arguing that inflation was driven by geopolitical developments and the "temporary effects of pricing formations."

Turkish President Recep Tayyip Erdogan believes high interest rates caused inflation and forced the Central Bank to cut the key interest rate from 19 to 14 percent between September and December, leading to a currency collapse.

The Turkish lira exchange rate fell 44 percent of its value against the dollar in 2021 and lost 23 percent against the dollar since the first of last January, despite the repeated interventions of the Central Bank.

The Turkish lira fell to its lowest levels since the crisis last December, while analysts questioned the ability of the authorities to keep it stable without new sources of foreign currency.

Recent data showed that the net international reserves of the Central Bank fell about $3.5 billion to $11.53 billion in the week ending May 13. Bankers estimated it fell to $10 billion or less in the following week.

The central bank justified its decision by saying inflation will start to fall with price and financial stability measures taken, and once "global peace" is restored, and base effects cease.

The Turkish Statistical Institute (TurkStat) announced that the economic confidence index rebounded in May after a three-month decline.

The index rose to 96.7 in April, a gain of 2.1 percent from the previous month, driven by the increases in consumer, services, and retail trade confidence indices,

On a monthly basis, the consumer confidence index increased by 0.4 percent to 67.6, the services confidence index rose by 6.1 percent to 121.7, and the retail trade confidence index increased by 1.7 percent to 121.4 in May, compared to the previous month.

However, the real sector manufacturing industry confidence index decreased by 0.7 percent to 107.0, and the construction confidence index declined by 2.2 percent to 81.6 in May from the month before.

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