In a recent update to its Global Macro Outlook 2023-24
report released on Thursday, Moody's has significantly revised its economic
growth forecasts for Turkey. The global rating agency now projects Turkish
economic growth to reach 4.2% in 2023, up from its previous estimate of 2.6%.
Additionally, Moody's has revised its forecast for Turkish economic growth in
2024 to 3%, up from the earlier projection of 2% as stated in a May report.
Moody's attributed these positive revisions to the strong
economic performance witnessed in the first half of 2023, citing Turkey among
the countries that exceeded their expectations.
However, Moody's also noted its anticipation of continued tight
financial conditions worldwide in the coming year, which it believes will act
as a constraint on global economic growth.
The report highlights that real gross domestic product (GDP)
growth for the G-20 countries is expected to slow to 2.5% in 2023 and further
to 2.1% in 2024, compared to the 2.7% growth observed in 2022.
Regarding the United States, Moody's mentioned that the risk
of a recession has diminished, but it emphasized that below-average economic
output is essential for inflation to consistently decline to the Federal
Reserve's target. As a result, Moody's has raised its growth forecast for the
American economy in 2023 to 1.9%, up from its earlier estimate of 1.1% in May.
Moody's also discussed challenges facing China's economy,
which have led to a downward adjustment in its growth expectations for 2024,
lowering the projection to 4.0% from 4.5%.
While inflation is expected to decline as planned and
continue to do so over the next year, Moody's emphasized that inflation-related
risks persist. Major central banks, including the US Federal Reserve, the
European Central Bank, and the Bank of England, are anticipated to maintain a
restrictive policy stance through 2024.
Moody's noted that the vigilance of these central banks is
driven by the potential for upside inflation risks resulting from tight labor
markets and resilient demand. It concluded that, despite relatively robust
economic activity throughout the year, elevated core inflation means central
banks cannot be certain they have fully achieved their inflation mandates at