The company unveiled its forecasts for 2010 at a press conference in İstanbul yesterday which was attended by Portfolio Strategist of Merrill Lynch Wealth Management for Europe, the Middle East and Africa (EMEA) Bill O’Neill, Wealth Management EMEA Director Jean-Marie Deluermoz and Wealth Management EMEA economist Türker Hamzaoğlu.
The forecasts, which show an optimistic view of the global economy, still predict that the recovery from the recent global financial crisis will take a longer time compared to recoveries from previous crises. The Turkish economy is predicted to grow by 4.5 percent in 2010, which will be followed by 5 percent growth in 2011. On the other hand, the firm expects labor market recovery to happen at a slower pace throughout the world, estimating that unemployment in Turkey will increase to some 15 percent in 2010.
Stressing the importance of long-term growth for developing countries, Merrill Lynch highlighted Turkey, South Africa and Saudi Arabia as three countries in the region working toward this goal. Drawing attention to the high levels of working-age population growth, which creates a big potential for further development, in Turkey compared to other countries in the EMEA region like Hungary or Poland, Hamzaoğlu noted that Turkey can remain among these three countries as long as real interest rates and inflation remain at low levels. He remarked that the Turkish Central Bank should convince investors across the world that low rates of inflation do not stem from economic recession but is permanent. The firm does not see Turkey’s signing of a stand-by deal with the IMF as a necessity, praising Turkey’s economic performance nad the strength of its banking sector in the face of the global financial crisis.
The report foresees a small risk of a double-dip global recession in 2010. The global economy, which is forecast to shrink by 0.9 percent this year, is forecast to grow by 4.3 percent in 2010. China and India are expected to lead the global economic recovery with growth next year of around 10 percent and 7 percent respectively.
