In its Winter 2017 Economic Forecast, the commission’s GDP outlook for Turkey in 2017 was 0.2 points lower than its previous estimate of 3 percent. The commission also said it expected Turkey to expand at a pace of 3.2 percent next year, which is also 0.1 points lower than a previous estimate published in its Autumn 2016 forecast.
Monday's report sees Turkey’s inflation at 8 percent in 2017 and 7.6 percent in 2018. The unemployment rate expectation of the commission was 11.2 percent for this year and 11.5 next year.
“Leading indicators suggest the economic headwinds are likely to continue in 2017. The depreciation of the lira may offer some relief by supporting export growth. Uncontrolled lira volatility, however, would pose a risk to the Turkish economy,” the report added.
However, the commission forecast Turkey’s economy to be back on track once “political and policy uncertainty reduce in the second half of 2017… after the referendum on the presidential system, private domestic demand will return to growth at a moderate pace”.