OECD cuts world growth forecast, warns of Omicron threat

The Organization for Economic Co-operation and Development (OECD) has revised up its 2021 growth forecast for Turkey by 0.6 percentage points to 9 percent.

"In the absence of further shocks, GDP growth is projected to be 9 percent in 2021 before easing to 3.3 percent in 2022 and 3.9 percent in 2023," the OECD said in its Economic Outlook report released on Dec. 1.

"Growth has been buoyant, pulled by very strong exports. Manufacturers have seized the opportunities arising in their traditional European and new overseas markets following disruptions in international value chains," said the report on the Turkish economy.

Turkey's economy posted a gross domestic product (GDP) growth of 7.4 percent in the third quarter compared with the same period in 2020, the Turkish Statistical Institute (TÜİK) announced on Nov. 30.

Annualized GDP grew to around $795 billion in the third quarter from nearly $765 billion through the previous three-month period.

The Turkish economy posted annual growth rates of 7.4 percent and 22 percent in the first two quarters of this year, respectively.

"Substantial real exchange rate depreciation has boosted net exports, but has severely destabilized relative prices, market expectations and risk perceptions. The competitiveness and profit margins of small-size manufacturers, who generally rely on short-term commercial loans denominated in domestic currency, have benefitted. Large firms integrated in global value chains, who import their technological inputs and rely on long-term loans denominated in foreign currency, have been negatively affected," the OECD report also said.

İt also warned that "highly indebted firms and households who relied on subsidized loans during the pandemic ... may face...