"Turkey remains susceptible to external and domestic risks, however, and prospects for strong, sustainable, medium-term growth look challenging without further reforms", the IMF said in a statement, outlining the preliminary findings from an official visit to the country.
The IMF explained that Turkey’s economy has rebounded largely because of implementing a policy stimulus as well as favorable market conditions following the sharp lira depreciation and associated recession in late 2018.
Turkey’s current account has also seen a remarkable adjustment, but more work is needed to maintain the positive trend, the IMF said.
In July, Turkey posted a current account surplus of $1.16 billion, switching from a $2.18 billion deficit a year ago, according to published reports.
The IMF pointed out that the positive market sentiment has provided Turkey an opportunity to enact additional reforms that would not only address existing vulnerabilities but would also strengthen policy credibility and set the economy on a higher and more sustainable growth path.
Consequently, the IMF said it welcomes Turkey’s proposed New Economic Program to identify challenges and implement comprehensive policies that will maintain the current direction of the economy.
Turkish President Recep Tayyip Erdogan accused earlier Western countries — primarily the United States — of triggering the economic crisis that Anakara faced last year.
Relations between Turkey and the United States escalated last August after US President Donald Trump authorized the doubling of previously imposed import tariffs on Turkish aluminum and steel to 20 percent and 50 percent, respectively. The US move resulted in the Turkish lira hitting a historic low. Turkey responded by increasing tariffs on 22 types of US goods worth $533 million. In particular, Ankara has introduced higher levies on US cars, alcohol, fruit, cosmetics and tobacco.
The Turkish Ministry of Finance and Treasury said in February that Ankara was not engaged in talks with the IMF on getting loans as it has managed to overcome the critical period without external support.