British Barclays improves GDP forecast for Russia and Turkey

Analysts at the British bank Barclays are becoming more optimistic about the economic prospects for Russia and Turkey, writes Bloomberg, citing a report by experts. Barclays sharply raised its 2023 GDP growth forecast for Turkey to 2.9%, while the Russian economy is expected to grow by 1.7%.

The improved outlook for Turkey followed the growth of economic indicators in the first half of the year. Analysts attributed this to the election, as well as “limited policy tightening in the post-election environment.” In this regard, the bank’s economists also revised their forecast for the growth of the Turkish economy in 2024 from 0.5% to 1.6%.

In Russia, fiscal stimulus and increased lending are leading to a “faster-than-expected recovery driven mainly by domestic demand,” Barclays said. At the same time, an increase in the key rate to 12%, as well as “risks of further tightening, new sanctions and logistical difficulties” threaten to reduce growth rates in the near future, the report says.

Against the backdrop of the weakening of the ruble, the Central Bank decided on August 15 to raise the key rate immediately by 3.5 percentage points to 12%. The regulator explained this decision by increasing inflationary pressure and inflationary expectations, which are under pressure from the dynamics of the exchange rate. Chairman of the regulator Elvira Nabiullina stated September 1, that the likelihood of a key rate cut at the next meetings is small.

On July 5, Russian Prime Minister Mikhail Mishustin said that the country’s GDP in 2023 could grow by more than 2% if “there are no force majeure circumstances.” Russian President Vladimir said that the growth rate of the Russian economy this year accelerated from month to month, so we can assume that in 2023 growth will completely cover last year’s decline.