In its quarterly Economy Outlook report for July 2010, Deloitte underlined the continuing positive appearance of the Turkish economy despite uncertainties in the global economy.
Turkey will be in need of some $40 billion for middle and long-term debt servicing in addition to a current account deficit of over $30 billion, bringing the total borrowing requirement to somewhere above $70 billion, the report noted and said next year’s necessities will also be at virtually the same levels.
Looking at the picture from the side of “resources,” the scene is not so soothing, especially taking into account the deceleration of foreign capital inflow into Turkey, the report noted. It argued that the domestic currency must not have a high value. The report said the implementation of the fiscal rule as of 2011 is quite important for the sustainability of this positive outlook.
Although the global economy was shaken by adverse news from European Union economies, Turkey seems to be continuing unaffected, the report read, and outlined its expectations as follow: Gross domestic product (GDP) will grow at a rate between 5.5 and 6 percent in 2010 and 3.3 percent in 2011; the country will achieve positive performance in budget accounts, causing postponements in raising indirect taxes and price hikes; and year-end inflation will be somewhere between 7 and 7.5 percent.
For 2011, the report guesstimated the inflation rate to likely be in the ballpark of 5 percent in the first few months due to the high base effect after tax adjustments early this year. However, it will again rise to 7 percent later in 2011, the report added.
