The positive indicators that the Turkish economy sealed last year, less than two months after the package of reforms and incentives announced by President Recep Tayyip Erdogan, prompted many international economic institutions to amend their expectations for this year.

On top of those institutions is the World Bank, which had expected Turkish economic growth of 0.5%, instead of a previous forecast of a 3.8% contraction for 2020, but quickly revised its forecast in its report issued on January 5, 2021, stating that it is expected to Growth of 4.5% in 2021, and 5% in 2022.

The Organization for Economic Cooperation and Development (OECD) has also revised its forecast of the contraction of the Turkish economy for 2020, from 1.3 to 0.2%.

The organization stated in a report that the Turkish economy witnessed a remarkable recovery after the first wave of the pandemic, expecting it to achieve a growth rate of 2.6% in 2021 and 3.5% in 2022, and that the unemployment rate will reach 13.7% in 2021, and 14.5% in 2022.

The report also praised the Turkish health infrastructure, which is credited with largely controlling the area of ​​the epidemic, which strengthened the impact of the economic and financial policies taken during the past year, which translated in one way or another to the improvement in economic performance in the last two quarters of 2020.

Fitch credit rating agency also put optimistic forecasts about the Turkish economy this year, indicating that the start of vaccination against Corona and the reduction of restrictions and measures to combat the pandemic, with the acceleration of the economic recovery in Europe, will lead to an acceleration of the growth of the Turkish economy in the second half. From the year 2021, in which the growth rate is estimated to reach 3.5%.

At the end of last year, the European Commission had expected a faster economic recovery for Turkey in 2021, as it estimated Turkish GDP growth of 3.9% in 2021 and 4.5% in 2022, and warned at the time of the negative impact on recovery and growth from structural weaknesses and the withdrawal of incentives. Monetary policy, which was later avoided by the Turkish Economic Administration.

Goldman Sachs also improved its forecast of a 2.5% contraction in Turkish GDP last year, in a review of its previous forecasts of a 5.1% contraction, and expected a 4% recovery to follow in 2021.

The remarkable growth of the Turkish economy affected the Turkish lira, which increased against the dollar (Al-Jazeera)

Remarkable growth

For the first time, the recent published forecasts of the Turkish Central Bank and Turkish businessmen organizations were close to a large extent with previous international expectations, as they expected GDP growth for 2021 at a rate of 3.8%, and about 4.3% in 2022.

In the context, Turkish President Recep Tayyip Erdogan said last week at the AKP conference that his country's government continues to implement the reforms required to achieve a strong renaissance in the Turkish economy, adding that his country is carrying out a process of mobilizing its potentials through an approach based on investment, production, growth, employment and exports.

The remarkable growth of the Turkish economy has affected the national currency, the "lira", which recently recorded an increase of 12% against the dollar, as its exchange rate, according to today's circulation, reached 7.35 per dollar.

It is noteworthy that Turkey's share of global exports during the first ten months of 2020 - between January and October - for the first time exceeded 1%, recording 1.03, while the number of exporting companies in Turkey reached 87,400.

a future vision

In an interview with Al-Jazeera Net, Professor of Economics and Finance at the University of "Artuklu" Metin Ayrol believes that the challenge facing Turkey in the coming period is its success in reducing the inflation rate in a sustainable manner and rebuilding the credibility of monetary policy.

He added that the elements that can positively affect the future outlook and the degree of credit rating of Turkey are increasing confidence in the sustainability of Turkey's external financing, increasing domestic savings, reducing the transfer of domestic cash to foreign, as well as reducing dependence on loans and external borrowing to increase growth.

Errol pointed out that the Turkish lira is the best performance among emerging market currencies since the beginning of 2021, due to the shift in policy in general and monetary policy in particular.

He stressed that the recovery of Turkish tourism later in 2021 and the resumption of export activity will turn the trade balance deficit by 3.5% last year into a surplus, in addition to the interest rate hike policies that were adopted by the central bank during the last quarter of last year.

He expected that the lira would improve and reach the level of 7 lira to the dollar during the next three months in the event of continued monetary tightening and controlling inflation rates, and positive news about vaccination and the Corona vaccine, which will help restore the wheel of economic life.