Growth in 2015 was resilient to several shocks, supported by buoyant domestic demand. In 2016, a 30 percent minimum wage increase, relaxation of macro prudential regulations, and accommodative monetary and fiscal policies will continue fuelling domestic consumption, keeping growth at about 4 percent. The fiscal stance is projected to relax somewhat in 2016, with tightening delayed to 2017. The central bank has kept the policy rate unchanged, has postponed normalization of the monetary framework, and is using international reserves to offset pressures on the Lira. Inflation is set to exceed the target again by a wide margin. Macro prudential measures have successfully curbed consumer credit growth but some relaxation will occur in April. The current account deficit is declining thanks to lower oil prices. Nonetheless, the net international investment position remains heavily negative and external financing needs are substantial. The government has announced an ambitious program of reforms aiming at increasing potential growth and reducing external vulnerabilities over the medium term.
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|Size: ||3.8 MB|
|Publisher: ||INTERNATIONAL MONETARY FUND|
|Date published: || 2016|
|ISBN: ||9781475553284 (DRM-EPUB)|
|Read Aloud: ||not allowed|