KPMG “Bakış”, which is published every three months, provide information on main macroeconomic indicators in Turkish and global economy, along with brief commentary. The topic of the seventh issue of Bakış is “Macro Trends in Turkish and Global Economy”.
The year 2017 started with positive expectations on a global scale after the economic challenges of 2016 and went on to renew hopes for stronger performances in advanced and emerging economies during the first half. While growth trends in the global economy are expected to continue for the remainder of the year, international institutions, such as the IMF and the OECD, have raised their growth expectations for 2017 to 3.5%.
Although growth in the US economy remained below expectations at 1.2%, the US Federal Reserve (Fed) raised its interest rates by 25 points at a meeting held in June, signaling that the slowdown in the economy would be a temporary one. Following an intense election marathon in Europe, the worries that political uncertainties in the region would escalate were put at ease after Emmanuel Macron won the French presidential elections and the central parties in Germany held onto power.
While uncertainties surrounding the Chinese economy remained on the agenda during the first half of the year, the Indian economy, which grew 6.1% in the first quarter, is expected to achieve a growth rate of more than 7% by the end of the year. On the other hand, Brazil, which grew by 1% compared to the previous quarter, is in the black once again for the first time in two years.
Following the April 16 referendum in Turkey, an increase in domestic demand was observed. Short term risks facing the Turkish economy appear to have tapered off to a stable level in the referendum’s wake. While a 5% growth was achieved during the first quarter, the annual growth rate of total loans reached 21.8% as of June, thanks to the acceleration in commercial loans.