Turkey: Country Economic Forecast: 20 Feb 2012

Oxford Economics
February 20, 2012
9 Pages - SKU: OFE6824027
Countries covered: Turkey

Despite the global financial turmoil in H2, Turkey's economy is likely to have grown by well over 8% in 2011 as a whole. And while part of this reflects the carry-over of momentum from when global conditions were more helpful, even in Q4 industrial output rose by 3.6% on the quarter helped by a more competitive exchange rate. But while industry may still be holding up, the rest of the economy is probably slowing much more significantly, under pressure from sharp rises in both inflation and interest rates. And a major slowdown in growth, with subdued private demand, is essential if inflation is to fall back from over 10% currently to the 5% target on a sustained basis and the current account deficit is to shrink from 2011's massive US$77bn. If this can be achieved, then the medium-term outlook remains optimistic, with growth moving back to trend at about 5% in 2013. But the forecast is subject to considerable uncertainty. There is a risk that as the slowdown becomes more evident the central bank reacts by easing policy too soon or the government steps in with a substantial fiscal boost. Such actions would keep inflation high and undermine the credibility of macro policy. And the major risk from the Eurozone debt crisis is still present; just because Turkey has weathered the crisis well to date (including a sizeable TRY rally this year) does not mean it will continue to do so. It remains hard to see how Turkey, with its large need for external financing, would not be gravely affected if the crisis led to a partial freezing in capital flows.

More International Trade reports by Oxford Economics

Country Economic Forecasts - Lebanon by Oxford Economics
Country Economic Forecasts - LebanonHopes for economic revival during 2014 have been dashed by regional and domestic political events, and indicators continue to point to ...
Country Economic Forecasts - Australia by Oxford Economics
Country Economic Forecasts - AustraliaFalling commodity prices and the prospect of weaker Chinese demand has led to a modest downgrade to GDP growth in 2015 ...
Country Economic Forecasts - Poland by Oxford Economics
Country Economic Forecasts - PolandThe NBP surprised the markets by implementing a 50bp cut at its October meeting (the consensus call had been for a ...
Country Economic Forecasts - Romania by Oxford Economics
Country Economic Forecasts - RomaniaRomania's economic outlook remains reasonably solid although recent monthly data show the economy has lost some momentum. The expansion in both ...
See all reports like this >>

More Turkey International Trade reports

Country Forecast Turkey November 2014 Updater by The Economist Intelligence Unit
Country Forecasts focus on the key factors affecting a country's political and economic outlook and its business environment five years ahead. Each report covers an ...
Country Report Turkey November 2014 by The Economist Intelligence Unit
Country Reports analyse political and economic trends in featured countries. They show you exactly how national, regional and global events will affect your business in ...
Country Risk Service Turkey October 2014 by The Economist Intelligence Unit
Country Risk Service is a comprehensive two-year forecasting service that monitors risks in 100 key emerging markets. It is designed for commercial bankers, institutional investors ...
Country Economic Forecasts - Turkey by Oxford Economics
Country Economic Forecasts - Turkey?In 2014 as a whole, we expect that GDP will grow by 2.8%, with most of the impetus coming from a ...
See all reports like this >>



    Online Download  USD 175  
    Global Site License  USD 438  
US: 800.298.5699
Int'l: +1.240.747.3093

Share this report

    Other tasks

    Join Alert Me now!
    Receive bi-weekly email alerts on new market research

    Sign up today!