Posted on 30 September 2010
As if running on from recent reports that trade and investment between the United Arab Emirates and Turkey is returning to pre-crisis levels, Danish bank Danske Bank (one of the leading banks in Europe) has cited investment levels in Turkey rising to pre-crisis levels as one of the reasons for its upping its growth forecast for the Turkish economy from 7.9% to 9.4%.
You don’t often see such large revisions, and the fact that you are seeing it in this case is another indication of just how rapidly the Turkish economy is growing, and how its fundamentals can only bring high growth in the near-mid term. Danske Bank also predicted strong growth of 5.8% in 2011.
As well as increasing investment, rising domestic demand, including investments and consumer spending are also back at near-pre-crisis levels according to the bank’s report.
Turkish GDP has so far grown 11% in the first half of 2010 according to Turkstat. The massive 10.3% year on year growth in the second quarter beaten only by the even-more-incredible 11.7% growth recorded in the first quarter.
The Organisation for Economic Cooperation and Development now acknowledges Turkey as the organisation’s fastest growing economy.
Arguably better than the strong growth is the strong financial infrastructure and fiscal stability that it stands on. According to the data that we have, Turkish inflation is around 5%, lower than it has been for many years (although it may be slightly higher now), and the budget deficit is “under control”. On top of that, because the banking infrastructure was overhauled after Turkey’s financial crisis in 2001, liquidity is high, arguably (but only just) a perfect recipe for growth.