Turkey

Current Economic Outlook

Turkey's growth picture in 2009 is gloomy, but a return to growth – albeit below potential – is expected next year. RGE projects ‐6.5% growth in 2009, in line with recent government and IMF projections. This deep recession breaks sharply from Turkey’s average annual growth rates of over 6% from 2002 through 2007. Unlike previous recessions (e.g. 2001), this year’s growth contraction was not triggered by a domestic financial crisis. While 2009 will not be a banner year for the Turkish economy, the tide could turn quickly in 2010. The banking sector is in good shape in the wake of structural reforms implemented after the 2001 crisis, meaning Turkey will likely experience a faster return to growth than those countries experiencing severe financial sector distress. Nevertheless, fiscal deterioration and lack of an IMF deal could weigh on growth going forward. RGE expects a gradual, bumpy road to recovery, with growth in the range of 2.5% to 3.0% in 2010, which is below potential and slightly below the government’s 3.5% growth projection.

Read RGE's Full Q4 Turkey Outlook.