IMF upgrades Turkey’s growth forecast for 2017

The International Monetary Fund (IMF) has upgraded its 2017 growth forecast for Turkey by 2.6 percentage points in a report released on Tuesday.

In its latest World Economic Outlook -- released before the annual conference of the IMF and World Bank on Wednesday, the IMF forecasted Turkey to grow by 5.1 percent in 2017, up 2.6 percentage points compared to a previous forecast of 2.5 percent.

Growth in Turkey is also predicted to speed up to 3.5 percent from 3.3 percent in 2018, according to the report.

Turkey's economy grew 5.2 percent in the first quarter of this year and 5.1 percent in the second quarter, compared with the same periods of 2016, according to Turkish Statistical Institute (TurkStat).

The fund has also upgraded short-term growth in emerging countries and developing Europe to 4.5 percent from 3 percent in its April 2017 outlook.

"This change is driven to an important extent by the revision to Turkey's growth in 2017 to 5.1 percent (2.5 percent in April), reflecting a stronger-than-expected outturn in the first quarter of the year, driven in part by a recovery in exports after several quarters of contraction and a more expansionary fiscal stance," the fund said.

The IMF expects global growth at 3.6 percent in 2017 and 3.7 percent in next year, up 0.1 percentage points from the fund's previous forecast in July.

The growth would mark the fastest growth since 2011. The global economy grew 3.2 percent last year.

"Monetary policy will need to stay tight in countries where inflation rates remain well above central bank targets, such as in Argentina and Turkey," the fund warned.