Moody's raised the Turkish economy's growth forecast for 2022 from 3.5% to 4.5%, according to the credit rating agency's Global Macro Outlook 2022-23 Report August update released Wednesday.

"Strong credit impulse, policies supporting upward minimum wage adjustments and loose monetary policy have supported domestic consumption, while demand from trading partners and a weak lira have bolstered exports and tourism recoveries," the report said.

The agency said it expects inflation in Türkiye to fall back to 70% by the end of this year, and to 40% by the end of next year, down from 80% for the 12 months ending in July.

The Turkish economy grew 7.6% in the second quarter of 2022 on an annual basis, according to Turkish Statistical Institute figures released earlier, making it the second-fastest growing economy in the G-20 after Saudi Arabia.

Moody's noted that manufacturing activity is expanding in emerging market countries including Türkiye, Brazil, India, and Indonesia.

The rating agency lowered the growth forecast of G-20 economies to 2.5% for 2022 and 2.1% for 2023, citing "significant deterioration in the outlooks of several major economies since the start of the year."

Previous projections made in May estimated G-20 economies to expand by 3.1% this year and 2.9% next year.

Among advanced G20 economies, the US is forecast to grow 1.9% and the euro area is estimated to expand 2.5% in 2022.

For emerging nations in the G-20, Russia’s economy is expected to contract 7% this year due to Ukraine war sanctions, while Saudi Arabia is projected to grow 7.2% due to an increase in its oil production and high oil prices benefiting its economy.

Source: Anadolu Agency