wiiw Current Analyses and Forecasts

Turkey: Calming-down of a growth bonanza

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in: Recovery - in Low Gear across Tough Terrain
wiiw Current Analyses and Forecasts No. 7, , pp. 85-87

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Economic performance in Turkey has been impressive, as evidenced by the GDP growth rate over the past year. Should things continue at this speed, continued high import growth will fuel fears of overheating. Even now the current account deficit is higher than ever before; it is predominantly funded by short-term capital inflows. The central bank is alert to the risk and has responded with a low policy rate in tandem with increases in reserve requirements. Fiscal support for this policy would be helpful, but moderation in terms of expenditures is not a popular topic in the lead-up to the general elections in June 2011. The government is thinking more in terms of boosting revenue via a privatization campaign (mainly related to the energy sector).

 

Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database

Countries covered: SEE, Turkey


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