Turkey has a higher than expected growth in the second quarter. The growth of the economy by 8.8% yoy but deepening fears that the expansion is unbalanced and puts the country at risk from external shocks, says Financial Times The data published on Monday revealed a decline in the rate of growth compared to the first quarter, but well above market expectations for growth of 6-8%.
“The economic activity is slowing, but the rate of delay may not be sufficient to correct imbalances in the Turkish economy, such as the growing current account deficit”, said Ozgur Altag, chief economist at BGC Partners in Istanbul. Published on Monday also details the current account deficit revealed a hole in the rate of 9% of gross domestic product (GDP) of the country for 12 months until the end of July. The deficit occurred despite the tourism boom in Turkey. Altag indicates that the country is vulnerable to external shocks and the drying up of capital flows, since 60% of the current account deficit is financed by portfolio investment and unidentified items that central banks defined as net errors and omissions.
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Barclays Capital said on Friday he expected the European Central Bank (ECB) to keep its key interest rate unchanged at 1.5% until December 2012 when the central bank will probably raise rates by a quarter point. In its previous forecast Barclays expected the ECB to raise interest rates a quarter point in December this year. The revision was announced after the British bank lowered its expectations for the eurozone as a whole. According to Barclays, the gross domestic product (GDP) of the eurozone in 2011 will grow by 1.8 percent instead of the originally projected 1.9%. Growth in 2012 even expected to reach only 1.1% instead of 1.6%. The bank analysts, including chief economist Julian Callow of Europe, indicate that even forecast to increase interest rates in December 2012 is “optimistic” and that this step may be postponed.
“There is a risk in the next 12 months, the ECB lowered its main interest rate by half a point, as part of coordinated action by the G-20″, they say. “In taking this step, however, the ECB will need to significantly lower their criteria for assessing the risks of inflation”.

The Gross domestic product (GDP) of Italy had fallen to 5% in 2009, while the budget deficit reached 5.3 percent of GDP, figures released today data from the Italian statistical office. In 2008, the country’s budget deficit was 2.7 percent of GDP, while the central bank forecast last month for the economy were to shrink by 4.8 percent. Also announced in February forecasts of the Italian Statistical Institute are to increase GDP by 1% for 2010, a deficit for the year amounted to 5.1 percent of Gross domestic product (GDP). Earlier today it became clear that the unemployment rate in Italy has risen in January to 8.6 percent from 8.5 percent in December. Announced data coincided with the average expectations of economists.
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The Gross domestic product (GDP) grew by 0.4 percent in the euro area (EU-16) and by 0.3% across the EU in the third quarter of 2009, said the community’s statistical office Eurostat. In the second quarter of 2009 growth was -0.2% in the euro area and -0.3% in the EU27. Compared with the third quarter of 2008, GDP declined by 4.1% in the Eurozone and 4.3% in the EU27, after -4.8% and -5.0% respectively for the previous quarter a year ago. In the third quarter of 2009, consumer spending fell by 0.2%, at 0% and -0.1% respectively for the previous quarter. Investments decreased by 0.4% in the eurozone and by 0.5% in the EU27 (-1.7% in reported and -2.5% the previous quarter). Exports increased by 2.9% in the Eurozone and 2.4% in the EU27 (-1.3% respectively at -1.4 percent and the previous three months). Imports increased by 2.6% in the eurozone and by 2.4% in the EU27 (in-2, respectively, 9% in both zones). To compare the U.S. GDP increased by 0.7% in the third quarter of 2009, after -0.2% in the second quarter of 2009.
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