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OECD almost doubles 2017 growth forecast for Turkey to over 6 pct

28 November 2017

Global economic growth is set to peak at an eight-year high next year as uninspiring investment and increasingly unsafe debt levels limit room for further improvement, the OECD said on Tuesday.

The group, which recommends policies for leading economies, predicts sustained growth in the USA this year and next and a sharper-than-expected increase in the countries that use the euro currency.

Turkey's economy expanded beyond forecasts in the first quarter (5.2 percent) and second quarter (5.1 percent) of this year, according to the Turkish Statistical Institute (TurkStat).

Chief Economist Catherine Mann urged faster re-training of workers amid drastic technological changes, extending retirement ages, investing in renewable energy and simplified tax rules to reduce risks of a new downturn.

"We've got wind under the wings but we're flying low", she said at the OECD headquarters in Paris.

"These numbers will grow by leaps and bounds", Trump tweeted of the economy this week, but the OECD analysis actually shows USA growth hitting 2.5% by 2018 but then dropping again to 2.1% the year after that.

But that "remains modest by past standards", the OECD said.

The OECD's previous Turkey growth forecast for 2017 was 3.4 percent, up from 3.3 percent.

PAProfessor Patrick Minford is Chairman of the Economists for Free Trade group

The report states that the lingering effects of the financial crisis are still being felt in terms of sub-par growth in the areas of investment, trade, productivity and wage developments, and this is likely to hold back global growth in the next few years, particularly in emerging economies.

As noted in the country's medium-term economic program announced on September 27, the government is targeting growth of 5.5 percent this year as well as through to 2020.

The US economy is projected to fall back by 2019, despite President Donald Trump's claims about the impact of his recent tax reforms.

The long-troubled eurozone enjoyed another boost as the OECD became the latest group to raise its forecasts for the 19-country region. It also raised its forecast for 2018 growth to 3.6%, up from 3.4%.

The main trouble spot is Britain, whose economy will continue to be hobbled by uncertainty surrounding its exit from the European Union.

Implementation of the extra budget helped government spending gain 2.3 percent on-quarter, the highest increase in five and a half years, with growth in construction investment up to 1.5 percent from 0.3 percent.

Another big concern of the OECD: employment is rising across most rich economies, but people's wages aren't.

But OECD secretary-general Angel Gurria warned while "growth has picked up momentum and the short-term outlook is positive" that "there are still clear weaknesses and vulnerabilities". "Clearly growth has to be made more inclusive".

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OECD almost doubles 2017 growth forecast for Turkey to over 6 pct