6/22/2009

Guardian: Turkey among first to recover in 2010

Guardian.co.uk – Turkey could be the first in emerging Europe to return to a stable growth next year thanks to its robust banking system, lack of export dependency and enviable demographics. Many analysts forecast Turkey, dubbed "China on the Bosphorus", could see the strongest growth of the ailing emerging Europe region in 2010, with forecasts for economic growth next year as high as 3.0 percent. "We expect the economy to rebound faster than anywhere else in emerging Europe," said economist Manik Narain at Standard Chartered Bank. "Turkey is much less reliant on exports than peers", said Narain, and while Turkey does depend on foreign capital inflow -- often cited as a negative -- credit markets are thawing. On the contrary, many banks in Eastern Europe are dependent on cash-strapped Western European parent institutions for funding and are short of the strong deposit base held by the Turkish banks. As credit markets thaw, Turkish lenders are well-placed to resume borrowing and lending activities to help spur domestic demand in the country of 72 million people. "You can only grow domestically when you have the credit for it. Turkey has the combination of a banking system less damaged by the crisis and a large market", said economist Christian Keller of Barclays Capital, who sees a three percent growth for 2010. Ratings agency Fitch forecasts Turkey will grow 2.5 percent next year, the highest growth of the region after Azerbaijan and topping a projected two percent rise in Russia.

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