6 Ocak 2011 Perşembe

Turkey: Lock, stock and three smoking barrels

Emre DELİVELİ          Hurriyet Daily News and Economic Review

“Stock” is the name of the game in my first column of the year: I would like to take stock by going over my 2010 forecasts of the Turkish economy as well as offer my lock, stock and barrel projections for 2011.

My 2010 Report Card…
One factor singlehandedly messed up most of my beginning-year projections: I did not expect capital flows to be so strong. As a result, growth came in much larger than I expected, which also affected my other projections: The budget deficit came in lower, mainly on the back of stronger than expected tax revenues. Similarly, the current account deficit was higher, another artifact of the strong growth.

On the positive side, I once again hit bull’s eye with inflation. And I was once again right on target with my policy predictions. I did not mind being in the minority when I claimed the IMF Standby Arrangement and the fiscal rule would not go through. And unsurprisingly they didn't.

Then, there is monetary policy, which warrants a separate paragraph: For the first three quarters, the Central Bank of Turkey, or CBT, was quite predictable, except for once, when I got under the impression that the Bank would start hiking during the summer, and on live TV at that, prompting the host to wonder what I had been smoking.

Nothing, really! It was just that I was able to see the strong growth in the economy as early as in April, thanks to my work at Konda, and was assuming the Bank would address that early on. Needless to say, the other forecasts I revised in April-May were rather accurate.

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