Macroeconomic Forecast Turkey

The robust rate of economic activity in Turkey witnessed during the first half of the year appears to be spilling over into H210, as leading indicators suggest a continued narrowing of the output gap. Though a moderation in activity is still expected towards the latter stages of the year, we are adjusting upward our full-year real GDP growth forecast to 6.3% from 4.7% previously. Our revised growth outlook for the Turkish economy this year is based on expectations for stronger final household consumption growth, which we now see coming in at 4.7%, and 8.0% real growth in gross fixed capital formation. Combined, these two categories of GDP by expenditure are projected to contribute as much as 4.9 percentage points (pps) to the headline real GDP growth rate in 2010, having previously shaved some 6.1pps off growth last year.

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