Zero margin for mistakes
After falling out with the US over access to Iraq, Turkey is regaining favour with the west as its economy revives. Its long-term goal is EU membership, but how far away does that target remain?
|Turkey is the world's fastest growing economy after China|
TURKEY IS THE world's fastest-growing economy after China. In the first quarter of this year GDP grew by 8.1%. The central bank's survey of business opinion and manufacturing data has indicated that the pace is continuing and that a figure close to the government target of 5% GNP growth for the full year is assured.
In addition, inflation is falling, unemployment is on the wane and exports are rising. The progress has been praised by the IMF and rewarded by Fitch Ratings, which nudged Turkey's sovereign rating slightly upwards to B-. The Turkish parliament has passed a series of laws that brought Turkey very close to fulfiling the so-called Copenhagen criteria required to start membership negotiations with the EU. Relations with the US, which reached their nadir when Ankara refused American troops transit rights to enter northern Iraq, are improving. "All the things that should matter are moving in the right direction," says Morgan Stanley researcher Serhan Cevik.
Is this as good as it gets or is the Turkish economy at last turning the corner?
First the good news.