Turkey experienced modest GDP growth of 1.8% in Q2 2012 driven entirely by surging exports to Iran, while domestic demand fell. The central bank has eased monetary conditions to support a potential upturn in consumer spending and investment. GDP growth is forecast to be 2.7% in 2012 and 4.2% in 2013 as global trade recovers, but downside risks include a weak Eurozone or higher-than-expected inflation undermining policy credibility.
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Turkey economic report oct2012 (TheCityUK)
1. Turkey economic report
October 2012
Regional commentary
Upcoming events:
Seasonally adjusted GDP rose by 1.8% on the quarter in Q2, the fastest pace of Turkey
expansion since early 2011. However, this strength was entirely driven by surging
exports (boosted by extraordinary sales to Iran) while both consumer spending and
8 November 2012
investment actually fell on the quarter.
Development and opportunities in
The combination of faltering domestic demand, the weakness of the global economy the Turkish market
and the expectation that inflation would fall significantly during H2 has prompted the This seminar organised by White & Case
central bank to loosen monetary conditions significantly over the last few months. This will cover current hot topics impacting
easing, together with a still fairly healthy labour market, may lead to a modest upturn the Turkish market. It will include an
overview of the key changes to the
in consumer spending and offer some support to investment. But at the same time,
Turkish Commercial Code and the new
growth in exports is set to moderate. Overall, GDP is expected to rise modestly in H2
capital markets law and its impact on
but more significantly through 2013 as global trade starts to pick up again, resulting in
initial public offerings, project financing
growth of 2.7% in 2012 as a whole and 4.2% next year. opportunities in the infrastructure
industry and managing risk issues.
But there remain serious threats to these reassuring forecasts. First, if the Eurozone
were to break up, Turkey would be hit very hard by the resulting financial turmoil.
7 December 2012
Second, inflation could be more ‘sticky’ than the central bank assumes, which might Turkey Market Advisory Group
undermine policy credibility and push the exchange rate lower, adding to inflationary meeting
pressure and the likelihood of a policy reversal. In addition, the rapid growth of bank Members of the Group are invited to
credit over the last five years may be a source of instability in the future. the next meeting.
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Government Response to the House of Commons Foreign Affairs Committee
Report of Session 2010-12
This note sets out the Government’s Response to the House of Commons Foreign Affairs
Committee Report of Session 2010-12, initiated by TheCityUK.
TheCityUK’s evidence to the Foreign Affairs Committee - ‘UK-Turkey relations and
Turkey’s regional role’
This note sets out views on behalf of TheCityUK in the form of evidence submitted to the
Foreign Affairs Committee concerning UK-Turkey relations and Turkey’s regional role.
Contact
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M: 07764 170056 M: 07799 746810
E: jim.begbie@thecityuk.com E: richard.adler@thecityuk.com
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