• On the following pages we present an updated outlook on the Turkish economy taking into account the latest economic releases for September and October.
  • The Turkish economy was hit very hard by the global crisis, but in recent months we have seen quite a remarkable rebound, especially in the Turkish manufacturing sector.
  • Turkish GDP growth improved to -7% y/y in Q2 from -14.3% y/y in Q1 (revised down from -13.6% y/y) and we expect the Turkish recovery to continue in the coming quarters. We expect GDP to contract on average by 6.9% y/y in 2009 and grow by 2.7% y/y on average in 2010.
  • 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 this year. However, for 2010, we expect higher inflation, averaging 5.8% y/y.
  • Balance of Payments has turned less negative during 2009, as the trade balance has improved. However as growth speeds up during H2 09 and in 2010, we look for increasing trade and current account balance deficits.