Announcing its global economic outlook report today, the IMF also shared its forecasts for the Turkish economy. National income estimates in TL and dollar also refer to the IMF’s average dollar exchange rate estimates.
While the International Monetary Fund (IMF) published its ‘global economic outlook’ report today, it also included its forecasts for Turkiye.
As every year, the IMF technical team shared the first statement and some of its predictions with the public on October 6, following its visit to Turkiye within the scope of the fourth article negotiations.
Today’s report and database included more detailed predictions about the Turkish economy.
DOLLAR FORECAST
The IMF does not include an exchange rate forecast in its database, but the implied average dollar exchange rate expectation can be calculated from annual national income estimates in TL and dollar terms.
Accordingly, the IMF expects the national income, which is ₺15 trillion in 2022, to increase to ₺24.6 trillion in 2023, ₺40.1 trillion in 2024, and ₺63.1 trillion in 2025, ₺95 trillion in 2026, ₺134.9 trillion in 2027 and ₺188.9 trillion in 2028.
The IMF expects the national income in US dollars, which is $906 billion in 2022, to increase to $1 trillion 155 billion in 2023, $1 trillion 341 billion in 2024, and $1 trillion 402 billion in 2025, $1 trillion 454 billion in 2026, $1 trillion 516 billion in 2027, and $1 trillion 576 billion in 2028.
Therefore, the IMF expects the average dollar/TL exchange rate, which is 16.57 in 2022, to increase to 21.28 in 2023, 29.92 in 2024, and 44.99 in 2025, 65.32 in 2026, 89.02 in 2027, and 119.85 in 2028.
In the Medium Term Program announced by the government in September, the annual average dollar exchange rate predictions were 23.88 for 2023, 36.78 for 2024, 43.94 for 2025 and 47.80 for 2026.
INFLATION FORECAST
The IMF expects the year-end official consumer inflation in Turkiye, which was 64.27% at the end of 2022, to be 63.99% at the end of 2023, to be 54.28% at the end of 2024, 55.40% at the end of 2025, 41.44% at the end of 2026, and 37.40% at the end of 2027 and 2028.
The year-end inflation forecasts in the MTP were 65% for the end of 2023, 33% for the end of 2024, 15.2% for 2025, and 8.5% for 2026.
GROWTH, UNEMPLOYMENT, CURRENT DEFICIT FORECAST
IMF’s growth forecast for the Turkish economy is 4% for 2023, 3% for 2024, and 3.2% for 2025 and beyond.
The growth forecast in the MTP was 4.4% for 2023, 4% for 2024, 4.5% for 2025 and 5% for 2026.
IMF’s narrowly defined unemployment rate estimates for Turkiye were 9.9% for 2023, 10.1% for 2024 and 10.2% for 2025 and beyond.
The unemployment forecast in the MTP was 10.1% for 2023, 10.3% for 2024, 9.9% for 2025, and 9.3% for 2026.
The IMF expects the annual current account deficit, which was $48.4 billion in 2022, to be $48.5 billion in 2023, $40.1 billion in 2024, and $39.3 billion in 2025, to be $39.6 billion in 2026, $37.9 billion in 2027, and $36.4 billion in 2028.
The fund expects the current account deficit to national income ratio, which was 5.3% in 2022, to decrease to 4.2% in 2023, 3% in 2024, and 2.8% in 2025, drop to 2.7% in 2026, 2.5% in 2027, and 2.3% in 2028.
EXPECTATION OF A SHARP DECLINE IN INVESTMENTS
The expectation of a decrease in investments also attracted attention in the IMF’s Turkiye forecasts.
The IMF expects total investments relative to national income in Turkiye, which was 35% in 2022, to decrease to 24.5% in 2023 and 17.6% in 2024, 13.7% in 2025, 12.3% in 2026, 11.5% in 2027, and 11% in 2028.
The IMF delegation, which met with government officials in Ankara, called for a further increase in interest rates, a reduction in the budget deficit, and an increase in wages according to the expected inflation, not the actual inflation.
Source: Sozcu / Prepared by Irem Yildiz