Turkey

RGE's Q1 2010 Turkey Outlook

The Turkish economy is on the mend after severely contracting in 2009. RGE estimates GDP tumbled 6% last year, a sharp contrast from the 6% average annual growth rate from 2004-08. The global financial crisis hit the economy hard, slowing capital inflows and reducing external demand. Fiscal and monetary stimulus, combined with a healthy banking sector, helped cushion the blow. In Turkey’s case, the crisis had a silver lining as it highlighted the economy’s enhanced resilience to external shocks. Unlike several peers in emerging Europe, Turkey weathered the downturn without requiring an emergency bailout package from external lenders. 

RGE foresees a return to positive, albeit below trend, annual growth in 2010. Due to a pick-up in external demand, a partial revival of capital inflows and the lagged impact of massive monetary easing, the Turkish economy is expected to expand between 3.5% and 4.0% this year. The recovery likely will be slow and gradual, but there are both upsides and downside risks to the forecast. Ultimately, a sustained upturn in growth hinges on a lasting...

Read the Q1 2010 Turkey Outlook.