• On the following pages we present an updated outlook on the Turkish economy taking into account the latest economic releases for August and September. 

  • The Turkish economy was very hard hit by the global crisis, but in recent months we have seen a quite remarkable rebound, especially in the Turkish manufacturing sector.

  • Turkish GDP improved to minus 7% y/y in Q2 from minus 14.3% y/y in Q1 (revised down from minus 13.6% y/y) and we expect the Turkish recovery to continue in the coming quarters. We expect GDP to have contracted on average by 6.9% y/y in 2009E and then grow 2.9% y/y on average in 2010E. 

  • Inflation has come down surprisingly fast in Turkey and it is currently at an historically low level. We now expect inflation to drop to close to 5% by the end of the year. But for 2010 we expect higher inflation, averaging 5.7% y/y. 

  • The current account turned less negative during 2009, as the trade balance improved. However, as growth speeds up in H2 09 and 2010, we look for increasing trade and current account balance deficits.