Turkish Central Bank expects economic slowdown followed by recovery
The Central Bank of Turkey's monetary policy board will keep tight monetary policy but expects the country's economy to grow strongly towards the end of the year.
A report detailing the board's meeting of February 15th reveals the bank is expecting economic growth to slow significantly next quarter. However, the slowdown is expected to be temporary, with a progressive recovery forecast by the board, Today's Zaman reports.
Medium-term, the board asserted it was necessary to maintain a tight monetary policy in light of higher than target inflation expectations and uncertainties regarding the global economic picture.
The Japanese economy grew a surprising 4.8% in the final quarter of 2006, leading the country to raise interest rates, and the Central Bank report suggested Japanese growth had increased the likelihood of Turkish monetary tightening.
However, the board did report that in the medium-term it expects inflation rates to decline. It also highlighted the importance of economic structural reforms and integration with the European Union.
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