Bloomberg News

Turkish Economic Imbalances ‘Unsustainable’, Goldman Says

January 23, 2012

Jan. 23 (Bloomberg) -- Turkey’s economy needs to “rebalance” after the current account deficit surged to a record, and any monetary easing by the central bank at a rates meeting tomorrow would be risky, Goldman Sachs Group Inc. said.

“Turkey’s recovery cycle has peaked sometime in early 2011 and the acute imbalances that the economy accumulated are unsustainable,” Goldman Sachs economists including Ahmet Akarli in London said in an e-mailed report today. “Turkey is still in the early stages of this rebalancing process and as a result it remains highly susceptible to external shocks.”

Any easing of monetary policy, including narrowing the central bank’s interest rate corridor, “would increase the risk of a harder landing and intensify the depreciation pressure on the lira,” Akarli said.

To contact the editor responsible for this story: Mark Bentley at mbentley3@bloomberg.net


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