November 5 (SeeNews) - Turkey's gross domestic product (GDP) is expected to fall by 2.5% in 2020, the European Commission said on Thursday, upgrading its May forecast for a 5.4% economic contraction.
"Although economic activity rebounded quickly in the summer, vulnerabilities and the withdrawal of policy stimulus are likely to sap the strength of the recovery," the Commission said in its Autumn 2020 Economic Forecast report.
The country's GDP is expected to grow by 3.9% in 2021 and by 4.5% in 2022.
The Commission expects a faster economic recovery in 2021, but cautions that structural vulnerabilities and the withdrawal of the monetary policy stimulus may suppress economic growth next year.
Private consumption is expected to grow by 2.5% in 2021 after a projected 0.7% drop in 2020, but will remain below its long-term trend, the EC added.
Unresolved balance sheet problems of the business sector, policy uncertainty, and elevated geopolitical tensions could hamper investment, whereas exports will continue to recover, returning to pre-crisis level in the end of 2021, according to the report.