Emerging markets

The International Monetary Fund (IMF) forecasts the Bulgarian economy to register a growth of 2.3 % both this and next year.

This is revealed by the latest World Economic Outlook of IMF released on Tuesday.

The prediction of IMF suggests that Bulgaria's economic growth will remain below the 3 % figure registered last year.

The onset of spring has seen a rally in emerging economies like Turkey, but the country's political risks are likely to rule out further growthThe European Central Bank's negative step on interest rates, as well as the U.S. Fed's postponement of its rate operation, look as if they have created a doping effect on "emerging economies," which also includes Turkey.

The International Monetary Fund (IMF) has upgraded its 2016 growth forecast for Turkey by 0.3 points in a report released on late Feb. 24, while the organization has pointed out a weakening global recovery, with the world economy "highly vulnerable" to adverse shocks. 

Concerns have raised in the world economy as emerging countries see huge capital outflows and economic slowdown with the end of liquidity partyThe global economy entered 2016 with the image of weak recovery in developed countries. However, the weak and fragile outlook in emerging countries, of which Turkey is one, particularly with the economic slowdown, scares everybody.

Further interest rate hikes by the U.S. Federal Reserve should be gradual or they risk hurting already fragile emerging economies, where many companies borrow in dollars, the head of the International Monetary Fund said on Jan. 12.

The World Bank slashed its growth forecast for the global economy in 2016 on Jan. 6, citing "disappointing" growth in major emerging-market economies like China and Brazil.

1) Markets see sharp routs ahead of Fed's rate move

The U.S. Federal Reserve finally raised interest rates on Dec. 16, 2015, ending an extraordinary period of government intervention in the financial markets that started at the height of the recession.  

The new government has submitted the temporary budget to parliament. It is also making the last preparations on the reforms. Statements are expected in a couple of days. 

The long-waited rate hike decision by the United States Federal Reserve (Fed) will most probably be made by the next month. The global markets have definitely prepared themselves adequately for the hike. They have prepared so much that many emerging currencies, including the Turkish Lira, has started to gain value against the U.S.

The BRICS group of emerging nations called on the Group of 20 (G-20) top developed and developing nations on Nov. 15 to strengthen their macroeconomic policy cooperation to prevent bad effects from a weak global economy and reduce risks to growth.