Goldman Sachs, a global investment bank and financial services company, has lowered its expectations for the Turkish economy’s contraction at yearend 2019 from 1.5 percent to 2.5 percent due to newly emerged stress points causing the Turkish lira to lose value, Bloomberg Turkish service reported on Monday.
The investment bank’s latest report foresees an increase in interest rates in the coming months; however, it expects that the central bank will tend to decrease interest rates starting with the fourth quarter of this year.
“Following a significant weakening in the Lira, Turkey’s current account was eliminated at the end of 2018. Nevertheless, given the accumulation of a large negative net international investment position, it is likely to take a number of years of healthy current-account flows to adjust the large negative stock of external imbalances,” the report also said, according to Bloomberg.
The Turkish economy is in recession, experiencing skyrocketing prices, high interest rates and growing unemployment.