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INSTANT VIEW- Turkey revises down growth forecasts for 2012-2013

ISTANBUL, Oct 9 (Reuters) - Turkey's economy is expected to grow 3.2 percent this year, below a previous forecast of 4 percent, before growing 4 percent next year, Deputy Prime Minister Ali Babacan said on Tuesday.

Announcing the government's medium-term programme for 2012-2015, Babacan said the government maintained its growth forecast of 5 percent for 2014 and 2015.

COMMENTARY TIMOTHY ASH, HEAD OF EM, STANDARD BANK

"Remember that this programme covers the next three years when Turkey faces local, presidential and parliamentary elections, plus a likely referendum on constitutional reform. In my mind, given the backdrop of elections, this looks like a prudent and very credible set of targets, and it sends the message, that despite all the noise, Erdogan has still sided with the trusted technos in the cabinet. If the rating agencies buy into this plan, IG status should follow."

GIZEM OZTOK ALTINSAC, ECONOMIST, GARANTI SECURITIES

"A more-than-expected slowdown in growth is resulting with a lower current account deficit to GDP forecast...Forecasts for 2013 are more cautious...The medium-term economic programme is offering a consistent macro frame, but we think especially for the end of 2013 5.3 percent inflation is pretty optimistic."

MARKET REACTION The yield on the benchmark two-year bond fell to 7.64 percent from 7.65 percent before the announcement.

The lira weakened slightly to 1.8143 against the dollar, compared with 1.8119 beforehand.

(Reporting by Seda Sezer)

((seda.sezer@thomsonreuters.com)(+90 212 350 7051)(Reuters Messaging: seda.sezer@thomsonreuters.com))

Keywords: TURKEY ECONOMY/GROWTH