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Turkey: Is Monetary Policy About to Change? (II)
[private]- The expectations built into the TCB’s strategy are clearly not materializing: inflation is rising, credit growth is not decelerating, a combination of booming domestic demand with modest (and vulnerable) export growth are broadening the current account shortfall, which during the first three months of the year approached 8% of GDP.
– There is a high and increasing likelihood that the central bank will be forced soon (perhaps as soon as the next three months) to apply a stronger medicine, including significant interest rate increases, to slow the economy towards a sustainable pace.
6-30-11–EMG INDICATORS AND INSIGHTS _Turkey’s GDP_[/private]