Turkey’s top business group and the IMF issue harsh warnings on the Turkish economy, which could be in for a shock due to a large current account deficit
As eurozone leaders started a “make or break” summit in Brussels yesterday, the Turkish economy received stark warnings about a possible spillover from the ongoing debt crisis.
The International Monetary Fund (IMF) on Dec. 7 predicted economic growth of just 2 percent next year for Turkey, providing an assessment that hints at the possibility of a short recession early next year. But Economy Minister Zafer Çağlayan brushed off the pessimistic review, saying the IMF would have to revise its projections.
However, a similar warning came yesterday from Turkey’s top business organization. “External crises can come knocking on our door at any time,” Ümit Boyner, chairwoman of the Turkish Industry & Business Association, said in a speech that intimated an unsustainable current account deficit. (p. 10)
Hopes for a managed slowdown in the economy were dented yesterday as industrial output continued to grow at a rapid pace. In October, the pace of expansion was 7.3 percent; on a month-to-month basis, the increase was the biggest since December 2010.
Meanwhile, the European Central Bank cut its main interest rate to 1 percent yesterday, displaying its concern for the health of the eurozone economy.
ISTANBUL / FRANKFURT