Financial services

UPDATE 1-Turkish central bank predicts strong growth despite coronavirus

(Adds detail, background, quotes)

ANKARA, March 29 (Reuters) – Turkey’s central bank expects high first-quarter growth thanks to a strong January and February, its deputy governor was quoted as saying on Sunday, as the nation battles to contain the coronavirus.

Turkey has implemented travel restrictions, limitations on the use of public space, a partial curfew for senior citizens and a $15 billion economic support package to help ailing sectors.

Despite the social distancing, Turkey’s coronavirus death toll rose by 16 to 108 on Saturday, with the number of cases climbing by 1,704 to 7,402, said health minister Fahrettin Koca.

However, the central bank’s Oguzhan Ozbas has seen no noticeable signs of weakening consumption, apart from travel spending, and says that the Turkish economy remains resilient, the state-run Anadolu news agency reported.

“Due to the strong trend in January-February, we are expecting a strong growth rate in the first quarter as a whole. Apart from travel spending, we have not seen noticeable signs of weakening consumption yet,” Ozbas was quoted as saying.

“With the pace of the outbreak slowing, we will see the Turkish economy recover rapidly. With its dynamic structure, the Turkish economy will be one of those that emerges from this period more quickly and with relatively less damage.”

The Turkish lira has fallen about 8% against the U.S. dollar this year amid the global sell-off sparked by the pandemic.

Despite the comments from Ozbas, ratings agencies have said Turkey could be hit hard by the pandemic.

Moody’s said Turkey would be the hardest hit among emerging markets in the G20, with growth contracting by 7% cumulatively in the second and third quarters.

Fitch Ratings said there were “large downside risks” to what was supposed to be a 2020 growth rate of about 3.5%, while both Goldman Sachs and Deutsche Bank cut their 2020 growth forecasts.

Turkey had been at the start of a rebound from a recession caused by a 2018 currency crisis.

Ozbas said that gains from the rebalancing period have improved the economy’s resilience. (Reporting by Tuvan Gumrukcu Editing by Andrew Cawthorne and David Goodman)


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