Turkish deputy PM signals possible change to growth target

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Turkish Deputy Prime Minister Ali Babacan said on Wednesday it should be “no surprise” if the government revises down its growth expectations for this year.

He added however that it had no immediate plans to do so.

Emerging markets such as Turkey have been hit hard since the U.S. Federal Reserve first indicated plans in May to begin tapering its huge stimulus program.

Turkey’s central bank has been reluctant to hike rates following a credit-fuelled boom, with Prime Minister Tayyip Erdogan keen to maintain strong economic growth ahead of elections next year.

The official forecast for Turkish gross domestic product (GDP) is four percent growth this year.

“Downward revisions on growth are on the table across the world because of the U.S. policy stance and Europe’s inability to recover,” Babacan, whose portfolio includes the economy, told CNBC-e television in an interview broadcast live.

“If we make a small revision or two, it should not be a surprise, when our biggest export market and other emerging markets are revising, but this has nothing to do with Turkey’s fundamentals,” he said.

He added that officials still needed further statistical data from the second quarter before any decision to change the GDP growth target.

Babacan also said the government’s forecast of exports reaching $158 billion by year end was still valid but appeared increasingly difficult to attain due to global economic conditions.

Volatility in global financial markets is the main cause for a recent sell-off in Turkish assets and not the anti-government protests that other officials have called a conspiracy to undermine the country’s economic stability, Babacan also said.