Elections, global liquidity risks for Turkey, says OECD

LONDON (Reuters) – Turkey’s economy should grow by 6 percent this year and next if the general elections go smoothly and external shocks to the system are limited, the Organization for Economic Cooperation and Development said on Thursday. The OECD said in its twice-yearly economic outlook that Turkey’s economy was «not yet fully resilient to domestic and international turbulence.» Turkey’s economy has turned in average growth rates above 7 percent for the last five years. But high inflation and a wide current account deficit, plus large external financing needs, leaves it vulnerable to domestic and international shocks. «Baseline growth projections remain about 6 percent for 2007 and 2008 in the absence of further domestic and international shocks, and provided the presidential and parliamentary elections do not create additional uncertainties and macroeconomic policies remain on track,» the report said. The OECD said it expected the current account deficit to decline slightly but remain above 7 percent of GDP. «Disinflation is expected to resume but at slower than official projections,» the report said.