Cyprus (Turkish) » Outlook

International Property Brokers forecast that the economic growth has been strong so far in 2006, but a weakening of the lira in May-June, accompanied by higher inflation and a sharp tightening of monetary policy, will lead to a slowdown in the second half of 2006 and the first half of 2007. GDP growth is forecast to slow from an estimated 5.6% in 2006 to 4.75% in 2007, before picking up again in 2008. The softer lira and weaker domestic demand will help to lower the current-account deficit slightly in 2007-08.

Turkey will adhere in broad terms to the three-year IMF stand-by agreement, which expires in early 2008, but slippages will upset the financial markets more than in the past.