Garanti improves 2014 GDP estimate from 2.6 to 2.9 pct

Newsroom 22/07/2014 | 11:41

Garanti Bank revised its economic prognosis for 2014 by 0.3 percent, from 2.6 to 3.9 percent, based on macro stabilisation and better-than-expected results for Q1. The exchange rate forecast also inched up from 4.55 RON/EUR to 4.45 RON/EUR.

Garanti also took into accounct cheaper financing costs and the increasing optimism of the business community, both factors leading to more investors in the country. The exchange rate should perform better, given that there is still a high likelyhood of cash inflows in the near and distant future, according to Garanti’s second quarter report.

Garanti is expecting industrial production to wind down in the following quarter, while the construction sector will bounce back. Public investments and European fund absorption rates are still performing below expectations, but the bank estimates investments will have a better yield in the rest of the year, especially in infrastructure.

Analysts from the Turkish bank are betting on exports calming down, after the “exceptional production” from last year. Imports on the other hand will inch up, as internal demand increase.

“Overall, these elements should not significantly influence the deficit, whic we estimate will remain at 1.1 percent GDP in 2014, covered 100 percent by direct foreign investments”, according to the bank’s press release.