CB expects continued speedy growth in Q4

Turkey's growth in the last quarter of 2010 will show up higher than that in the previous quarter, predicted Central Bank Governor Durmus Yilmaz yesterday. Speaking to a meeting in Istanbul organized by the Anatolian Lions Businessmen's Association, Yilmaz said that there are signs that the slowdown in the third quarter of last year – when Turkey saw gross domestic product (GDP) growth of 5.5 percent, down from an 11 percent average in the first six months – won't last through the year's end. "Industrial production, the (industrial) capacity utilization rate, and expectation of future orders all show that there has been an acceleration in economic activity," he said, also dismissing claims that the economy is overheated. Yilmaz also stressed that Turkey's economic growth is driven by domestic demand, as the recovery from the global financial crisis in Turkey's export markets seems to be much slower than that in domestic market. That is the reason for the divergence between export-oriented companies and those with sales mostly inside Turkey, he said. On unemployment, one of Turkey's most troubling economic problems, he said companies re-engaged in extensive recruitment during Q4 and that the 11.3 percent unemployment rate of last September is likely to have dropped. CB data suggest that inflation-related developments are in line with its medium-term targets, Yilmaz said. "But the world is changing quickly," he added. "There are problems particularly in the field of commodity prices. That is why we should closely follow (global trends) with caution." CB estimates for 2011 call for inflation of about 5.4 percent, down from 6.4 percent.