Turkey to cut 2013 growth target to 3%

Turkey will revise down its growth target for 2013 to 3 percent from 4, due to an expected slowdown in the U.S. Federal Reserve's stimulus program and tensions in the Middle East, Turkish Today's Zaman reported Saturday. Earlier, Turkish Economy Minister Zafer Caglayan announced that the government expects growth of 3 to 4 percent in 2013 and 4 percent in 2014, adding that uncertainties of the world economy posed significant risks to Turkey's economic outlook. "All the figures in the medium term plan, including inflation, will be revised," Caglayan told reporters. Analysts said that while Turkey has been strongly affected by global monetary conditions, it has its own underlying vulnerability of a large current account deficit. This vulnerability was exacerbated by global market uncertainties due to the U.S. Federal Reserve's decision to taper a stimulus package and two weeks of domestic political unrest back in June. Consequently, the Turkish lira has already fallen by 13 percent against the dollar since the start of the year, but it may yet sink further, they added. Turkish Central Bank Governor Erdem Basci said earlier that capital outflows from Turkish market since the beginning of May had amounted to 7.9-8 billion dollars, mainly due to the fluctuation in the world financial market. But analysts estimated a higher level of outflows. Moreover, finance experts are concerned about a possible U.S. intervention in Syria, which shares a 900 km border with Turkey, as it could push oil prices higher in the short term, further increasing Turkey's imports bill and its gaping current account deficit. The Turkish government previously expected a 4 percent growth rate this year and 5 percent next year. However, experts said the economy is instead likely to expand at 3 to 4 percent in 2013.