Turkey 

Turkey country policy

Policy established 21 April 2010

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 1500 mln euro
• Early warning signal 1150 mln euro
• - of which was used as at 2011-12-31 196 mln euro

Country class: 4

Banken met een rating lager dan BB- of geen rating: case by case beleid

Banks with rating lower than BB- or without rating: case by case policy

Turkey country facts

Atradius Dutch State Business Economic Research

Country Report last updated :  August 30th, 2011

Country :  TURKEY

Political Situation
Stable

Head of state
President Abdullah Gul.

Form of government
Parliamentary democracy. 
 
Internal Economic Situation
Domestic Demand-Led Overheating

General situation
After the deep recession of 2009 (real GDP-decline of 4.8%), strong economic recovery with clear signs of overheating: real GDP-growth of 8.9% in 2010, accelerated to 11% 2011Q1. This economic boom is driven by domestic demand on the back of (too) low interest rates, public sector spending and a liquidity boost by foreign capital inflows and bank credit growth. After being propelled to 8.6% in 2010, inflation has slowed to 6.3% mid-2011 which is still high. Solid banking sector also due to reforms after the 2001-crisis; in view of the present economic overheating, stricter monetary conditions and a turnaround of the economy in the coming months may trigger a much higher NPL-ratio due to more private sector defaults. Large informal economy but more moderate corruption: 56th of 178. 
 
External Economic Situation
Large External Imbalance

Main sources of foreign exchange
Clothing and textiles (19%), cars (13%), base metals (13%), agricultural goods (10%), tourism, private transfers.

Main foreign markets
EU (46%), Iraq (5%). 

Main expenses of foreign exchange
Chemicals (15%), oil/gas (12%), cars (9%).

Balance of payments  
Since 2009 imports (incl oil) have increased far stronger than exports, contributing to much weaker trade and current account figures. These deficits are covered by capital imports, part of it short term volatile origine. During 2011 effective depreciation of the lira-exchange rate.