April 9 (SeeNews) - Turkey's economy is expected to grow by 0.5% in 2020, over 3 percentage points lower than the previous estimate, due to the outbreak of the novel coronavirus disease (COVID-19), the World Bank said.
Growth is expected to bounce back to 4% in 2021 and 2022, the World Bank said in its Europe and Central Asia Economic Update Spring 2020, considering data as of March 20.
Government stimulus will contribute to the little growth expected in 2020 while investments and exports are expected to fall.
"The global disruption to trade, capital flight to safety, and rapidly rising risk premia will impact Turkish exports and tourism, access to finance, currency stability and inflation," the World Bank said.
Turkish president Recep Tayyip Erdogan in March unveiled a 100 billion lira ($14.9 billion/13.65 billion euro) relief package which includes support to low-income households and pensioners, as well as tax breaks and financial support for firms.
Inflation is projected at 11% in 2020, whereas the general government fiscal deficit is expected to expand sharply to 4.5% of GDP, only to narrow to 2.9% of GDP by 2022, the report reads.
Over the medium term, the poverty rate should remain at around 9% of the population. However, a stronger response of the social protection system may be needed, despite the announced package with income-support measures.
Turkey's GDP grew 0.9% year-on-year in 2019.
(1 euro = 7.32183 lira)