EBRD revises upwards Turkey's GDP growth forecast to 3% in 2012.

By bne IntelliNews October 26, 2012
The European Bank for Reconstruction and Development (EBRD) revised upwards its forecast for Turkey's economic growth in 2012 and 2012 to 3% and 3.7%, respectively, as the country seems to be avoiding a possible hard landing following its capital inflow-fuelled credit boom. The projections are included in the latest edition of the bank's Regional Economic Prospects report. Although the Turkish economy has slowed down significantly in 2012 due to drop in domestic demand, with real GDP stepping down to 2.9% in Q2 from 8.5% in 2011, growth will reach 3% by the end of the year. Current account deficit remains a key risk although external rebalancing has already started throughout the first half of 2012. Private capital flows, which decreased in H2 2011, have also started to recover. Inflation is likely to remain above the central banks year-end target of 5.5%, in view of the recent rise in agricultural prices.
EBRD Regional Economic Prospects, October Current forecast Change from previous forecast
2012 2013 2012 2013
Turkey 3 3.7 0.3 0.2
Russia 3.2 3.3 0.1 0
Southern and Eastern Mediterranean AVERAGE 2.9 3.8 0.8 0.1
Central Asia AVERAGE 6.3 6.9 0.3 0
Central Europe and the Baltic AVERAGE 1.4 1.7 -0.3 -0.2
South-eastern Europe AVERAGE 0.4 1.6 -0.3 -0.1
Eastern Europe and the Caucasus AVERAGE 2.4 2.8 -0.6 -0.9

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