Barclays raises economic forecasts for Turkey and Russia

Barclays raises economic forecasts for Turkey and Russia
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Recent trends point to more robust growth, although challenges loom on the horizon.

Barclays Plc, a leading British bank, has taken a decidedly optimistic view of the economic trajectories of Turkey and Russia. Their analysis underscores the crucial role of "active policy support" in driving growth in these countries.

In a significant revision, Barclays now expects Turkey's GDP to grow by 2.9% in 2023, up sharply from its previous forecast of 1.2%, Bloomberg reports. Analysts Brahim Razgallah and Zalina Alborova are credited with the updated outlook. The bank also revised Russia's GDP growth rate for this year to 1.7%.

Turkey's revised economic expectations can be attributed to its impressive growth rate in the first half of 2023. This rebound is primarily related to the measures taken in the context of the recent elections and the subsequent easing of policy restrictions. Barclays' economic team has further recalibrated its forecasts for 2024 and now expects Turkey to grow by 1.6%, a significant jump from its previous estimate of 0.5%. However, the bank also warns of variable risks: while 2023 looks promising, 2024 could see some economic headwinds.

A faster-than-expected recovery characterizes Russia's economic scenario. Initiatives such as fiscal stimulus and increased lending have contributed to this, with domestic demand playing a central role. However, the Barclays analysis also acknowledges potential obstacles for Russia. Russia's growth may face some near-term constraints with the recent emergency interest rate hike to 12% and the looming threat of tighter policy, new sanctions, and logistical barriers.

In this complicated global economic landscape, these insights from Barclays provide a nuanced perspective on the future of Turkey and Russia, acknowledging both the opportunities and challenges that lie ahead.