OECD Revises Turkey's Growth Estimate,cuts Global Outlook To Post-Crisis Low

The Organization for Economic Co-operation and Development (OECD) made a major revision in its projection for Turkish economic growth in 2019, as it warned about escalating trade tensions are eroding global growth prospects,

with the world economy set for its slowest expansion since the global financial crisis. In an update to its economic forecasts from May, the biggest upward revision among the member countries the institution made was for Turkey. It now projects the economy would contract 0.3% this year. It had previously estimated the economy would contract 2.9%. On the other hand, it did not change its projection for 2020 and expects the Turkish economy to post growth of 1.6% Noting that Turkey’s GDP in the first half of 2019 was stronger than expectations helped by temporary fiscal and quasi-fiscal spending and strong tourism exports, the OECD said: “However, investment continues to contract and credit growth is still weak.” It noted that monetary policy easing should help growth to pick up modestly to just over 1.5% in 2020, provided domestic and international confidence is maintained.

As it slashed its global forecast, the OECD warned the trade war between the U.S. and China has plunged global growth to its lowest levels in a decade. It said that the global economy risked entering a new, lasting low-growth phase if governments continued to dither over how to respond.