IMF Says Turkey’s Economy Prone to Shocks Amid Reserve Losses

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The International Monetary Fund forecast strong growth for Turkey this year, while saying risks have increased after reserves declined from previously low levels.

Gross domestic product in Turkey is expected to expand by about 5.75% in 2021 and return to a slower trend next year, the IMF said in statement on Friday after a so-called Article IV review mission to the country.

Turkey’s gross reserves are well below the recommended adequacy range, and net international reserves are negative when foreign-exchange swaps with the central bank are excluded, according to the IMF.

Turkey’s fiscal space is limited by contingent liabilities and potential debt rollover pressures, while lira depreciation added to non-financial corporate and bank balance sheet strains, according to the IMF.

Turkish Central Banker Opens Up on Using Reserves to Buoy Lira

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