The EU has increased its 2018 growth prediction for Turkey by two percentage points, says a new report published recently. The European Economic Forecast Autumn report predicts that Turkey’s economy will grow by 5.3 percent this year, more than two percent higher than its previous forecast in May, which was three percent. The 19-country eurozone will grow by 2.2 percent in 2017, its fastest pace in a decade, the European Commission said in December. “After five years of moderate recovery, European growth has now accelerated,” EU Economy Commissioner Pierre Moscovici said. “We see good news on many fronts, with more jobs being created, rising investment and strengthening public finances,” he added. The European Commission has stated that 2018 Eurozone growth would drop to 2.1 percent, while Turkey’s would be closer to five percent.
Turkey’s economy grew 5.2 percent in the first quarter of 2017 and 5.1 percent in the second quarter, compared with the same periods in 2016, according to the Turkish Statistical Institute (TÜİK).
The increase comes after other global institutions, namely the International Monetary Fund, the World Bank and the European Bank for Reconstruction raised their growth forecast for Turkey for 2018.
U.S.-based credit rating agency Fitch Ratings affirmed Turkey’s credit rating at ‘BB+’ and said that its economic outlook remained stable. While Turkey’s structural indicators are “generally superior” to peer countries, its current account deficit is larger. Fitch forecasts Turkey’s growth to average 4.3 percent between 2017 and 2019.
OECD reports that Economic growth is estimated to have exceeded 6% in 2017, driven by strong fiscal stimulus and an export market recovery, and is projected to edge down but to stay between 4½ and 5% in 2018 and 2019. Consumer price inflation remains far above the target and disinflation is projected to be slow.
How does this effect the property market, since the coup attempt July 2016 there was a momentary pause to investment whilst investors took stock of the Governments position including that of the position of President Erdogan. With fresh elections and the support of the people he has made enormous strides to pacify and encourage the markets which has proved extremely successful. Demand for property in Turkey has never been higher, and property sales will continue in part to drive the economy. The number of properties sold to foreign buyers accelerated in 2017 rising by 21.4% year-on-year to November 2017, as incentives like citizenship and residence visas encouraged foreign property investment. Many taking advantage of the buoyant Turkish property market. Demand still outstrips delivery in major cities like Istanbul and this should continue for the next few years.
Istanbul continued to lead in terms of foreign investment both in business and in property sales, Iraqi citizens topped the foreign buyers list, followed by Saudis, Kuwaitis and Russians. Many people in the Middle East see Turkey as a country for flight of safety, if they have difficulties in their own country of residence. In these turbulent times Turkey and especially Istanbul is a sure bet for capital growth and great rental yields. We will be launching several packages throughout 2018 for investment or passport buying for our clients.