Turkey - Country Forecast

"Economic growth has been strong so far in 2006, but a sharp weakening of the lira in May-June, accompanied by higher inflation and monetary tightening by the Central Bank of Turkey, will lead to a slowdown in the second half of this
year and the first half of 2007. GDP growth is forecast to be 4.5% in 2006 and about 4% in 2007. " (Economist, August 21 2006).

Yogi Berra once said "Prediction is very hard, especially about the future!"

But, come on! Just look at the statistics as of Aug 15 for God's sake.

• First quarter GDP growth rate was 6.4 percent.
• Second quarter industrial production (released on Aug 8) is 9.3 percent (it was 3.5 percent in the first quarter).
• Based on this information, one can easily predict that second quarter growth will be 9-10 percent.
• This means that in the first half growth rate will be around 8 percent.
• For the remainder of the year, the country should fall into a sudden and severe recession (that nobody expects, even the Economist) to get 4.5 percent average growth rate in 2006.
• A more reasonable estimate (say 3-4 percent for the second half) would give us around 6 percent rate for the year.

Of course, this is the same magazine that predicted a recession in Turkey at the beginning of 2004 ...the growth rate, it turned out, ended up 9 percent.

Update (Sep 13): GDP growth: 2006Q2: 7.5%, 20061H: 7.0%