Macroeconomic Forecast Turkey

Latest balance of payments data from the Central Bank of the Republic of Turkey showed the country posted a current account deficit of US$8.64bn over the first three quarters of 2009, down 75.9% y-o-y. In line with our core view, developments in the goods trade account were the key factor driving down the headline current account deficit. The net export shortfall from Q109-Q309 came to just US$17.04bn, down from US$45.03bn in Q108-Q308. This owed mainly to a sharp 39.0% y-o-y contraction in imports. For the full year, we hold to our forecast for Turkey's current account to post a deficit of US$12.4bn (2.0% of GDP). In 2010 we expect trends to reverse, with a tentative macroeconomic recovery pushing domestic demand and in turn, imports higher. We forecast the current account shortfall to rise to US$19.6bn (2.5% of GDP) by end-2010.

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