Turkey: Moderate recovery
Output is on track for a record year-on-year decline in 2009 of 6.5%. However, four quarters of negative growth ended with a strong rebound in the second quarter of 2009. Inflation fell from 11.9% in October 2008 to 5.3% in September 2009, and the current account deficit is expected to fall from 5.5% of GDP in 2008 to around 2% in 2009. After recovering more moderately in the rest of the year, GDP is projected to expand by 3.75% in 2010 and 4.5% in 2011.
Policymakers should aim to preserve the improvement in investor confidence, which permitted a decline in risk premia and real interest rates. Making further progress in fiscal transparency is crucial in this context and the planned fiscal rule should be backed by specific consolidation measures. Structural reforms boosting the competitiveness of the business sector would help improve the performance of the economy in the upturn.
©OECD Observer 2010