Saturday, April 7, 2012

Turkey has one of the world’s zippiest economies, but it is too reliant on hot money

    Saturday, April 07, 2012   No comments


Visitors to the top of the Galata Tower in Istanbul are treated to a panoramic view of the old town across the Bosphorus. Originally a wooden lighthouse dating from the sixth century, the tower was rebuilt from stone in 1348 by Genoese merchants. It is an enduring symbol of the benefits of foreign capital to Turkey.

Bustling below is a city of 15m that lies at the heart of one of the world’s fastest-growing economies. Figures released on April 2nd showed that Turkey’s GDP rose by 8.5% in 2011 after a 9% increase in 2010 (see chart 1). These are the sort of growth rates that mighty China would be pleased with. Jim O’Neill of Goldman Sachs, who coined the acronym BRIC to denote the big emerging economies of Brazil, Russia, India and China, has included Turkey in MIST, a second tier of biggish rising stars, alongside Mexico, Indonesia and South Korea.


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