Macroeconomic Forecast Turkey

The outlook for the Turkish economy has worsened steadily through the first five months of 2007. Amid spiralling inflation, renewed monetary tightening, a weakening external climate and a spike in import values owing to energy costs, we have revised down our 2008 real GDP growth to 3.8%. We have also extended our downward revisions through the long term. That said, we maintain that the long-term outlook remains distinctly positive. Rising purchasing power and lower interest rates, alongside an improving external climate, should accelerate economic expansion in 2009-2012, with growth forecast to average a robust 6.5% during that period.

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