IMF: Turkey's Economy May Shrink by 5 Percent in 2020

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Turkey's economy may shrink 5 percent this year and the unemployment rate may rise to 17.2 percent, according to a report by the International Money Fund (IMF).

The first part of the IMF's global economic outlook report, titled "the Great Lockdown," says that the output loss caused by the coronavirus pandemic "likely dwarfs" the losses that triggered the global financial crisis in 2008.

"It is very likely that this year the global economy will experience its worst recession since the Great Depression," it says.

The IMF has revised its projection of global economic growth from 3.3 percent to -3 percent and expects a 5.8 percent growth in the following year with the normalization of the economy.

For Turkey, it expects the economy to grow by 5 percent and the unemployment rate to be 15.6 percent in 2021. The country's unemployment rate was 13.7 percent at the end of 2019.

The IMF projects an inflation rate of 12 percent for Turkey at the end of both this year and 2021. Its projection for the country's current account balance is 0.4 percent and -0.2 percent for 2020 and 2021.

For 2021, the report says, "Strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems."

"Countries urgently need to work together to slow the spread of the virus and to develop a vaccine and therapies to counter the disease. Until such medical interventions become available, no country is safe from the pandemic (including a recurrence after the initial wave subsides) as long as transmission occurs elsewhere." (HA/VK)