April 8 (SeeNews) - The International Monetary Fund (IMF) said that it expects Turkey's economy to expand by about 6% in 2021 and then to settle back to trend to 3.5% in 2022, keeping unchanged its January projections.
"The baseline assumes that the authorities remain committed to a firm monetary policy stance, with no easing in 2021. Further measured monetary policy tightening would likely be needed should inflation expectations fail to stabilize," the IMF said in the April edition of its World Economic Outlook (WEO) report published earlier this week.
Last month, Turkey's central bank raised its one-week repo rate from 17% to 19% and said that additional monetary tightening will be delivered if needed. Considering the upside risks to inflation expectations, pricing behavior and the medium-term inflation outlook associated with these developments, the Monetary Policy Committee has decided to implement a front-loaded and strong additional monetary tightening, the central bank also said at the time.
The country's inflation is expected to climb up to 13.6% this year from 12.3% in 2020. Turkey's consumer prices are seen slowing to 11.8% in 2022, according to the IMF's report.
Turkey's current account deficit is forecast to fall to 3.4% of GDP in 2021, from 5.1% in 2020. In 2022, the current account gap is expected to narrow to 2.2%, the report showed.
Unemployment in Turkey is projected to fall to 12.4% at the end of 2021, from 13.1% in 2020. In 2022, the unemployment rate is projected to decrease further to 11%.