Turkey’s economy is expected to record double-digit growth in 2021, President Recep Tayyip Erdoğan said Thursday, higher than a previous government forecast.

"Although international institutions estimate a 9% growth, we think that we will reach double-digit growth figures at the end of the year," Erdoğan said in a video message at the Turkey 2023 Summit, organized by Turkuvaz Media Group’s Sabah daily and broadcaster A Para.

Turkey’s economy grew 21.7% year-on-year in the second quarter, rebounding after a sharp slowdown a year earlier driven by COVID-19 restrictions.

The government expected the economy to grow by 9% this year before settling at about 5% growth next year, according to medium-term forecasts released in early September.

Recalling that the country’s gross domestic product (GDP) grew 7.2% and 21.7% in the first two quarters, Erdoğan said the country will continue to prosper.

He went on to say that there is hope for winning the fight against the coronavirus, and steps to normalize the health, transportation, education, and trade sectors were bearing fruit.

The global economy, which narrowed last year, is regaining a foothold, production and export activities are increasing, and there is a strong recovery in tourism, he noted.

"However, as humanity solves the issues regarding the health dimension of the pandemic, it faces different problems; global inflation, like the economic recession last year, is the most serious problem facing humanity today," Erdoğan added.

He noted that shelves inside supermarkets were left empty due to problems in supply chains leading to an increase in prices of consumer goods and further burdening the public.

"This situation led to an increase in racism, Islamophobia and xenophobia, especially in Western countries," he said.

In light of these threats also affecting Turkish citizens abroad, Turkey has devised and implemented policies to safeguard their interests, he said.

He noted that many developed nations had shut off economic activity due to the pandemic, but Turkey continued production while complying with health measures.

EBRD upgrades forecast

Just before the president’s remarks, the European Bank for Reconstruction and Development (EBRD) said it expects the economy to grow by 9% this year, buoyed by a revival in exports and tourism.

The EBRD, which updated its global economic outlook, had forecast in June that Turkey’s economy would grow by 5.5% in 2021 but raised its estimate amid strong domestic demand and exports and the reopening of the crucial tourist sector as the pandemic eases.

Yet, it said high inflation could still harm the recovery.

The EBRD also said in a report published on Thursday that it expects Turkey’s economy to settle near potential growth of 3.5% next year, driven by exports. However, it added rising energy prices pose risks.

The annual inflation rate rose to 19.89% year-on-year in October, according to official data on Wednesday, driven by food, services, housing and transportation prices, reflecting in part soaring world energy prices.

The Central Bank of the Republic of Turkey (CBRT) surprised markets by pivoting to policy easing in September, sharply cutting its benchmark policy rate to 16% in the last two months.

The bank says inflation is temporary and has signaled more, albeit less aggressive, easing before the end of the year. Last week it said achieving a current account surplus would ease lira pressure.

In addition, international credit rating agency Moody’s on Wednesday also upgraded Turkey’s 2021 economic growth forecast from 6% to 9%, citing increasing export income and a positive course in employment.

It sees the economy expanding by 4.8% in 2022 and 5% in 2023.

Last month, the International Monetary Fund (IMF) noted the economy should grow at a hot 9% rate this year, well up from a July forecast of 5.8%.

The Organisation for Economic Co-operation and Development (OECD) in September said it sees the country’s GDP rising 8.4% this year, up from its earlier forecast of 5.7%.

Among others, the global credit rating agency Fitch in August said it expects the growth to come in at 9.2% from its earlier estimate of 7.9%.

Its peer Standard & Poor’s (S&P) has also raised its forecast to 8.6%, up from its earlier estimate of 6.1%.