Market Report, "Turkey Country Risk Report Q4 2015", published

Relative to the past decade, we expect slower, more balanced growth in the next decade on the back of less abundant foreign capital inflows and slower domestic credit growth.

Political instability will be elevated following November 2015 snap election, weighing on business and consumer confidence. The ruling Justice and Development Party (AKP) is unlikely to regain it parliamentary majority, and will be forced into an inherently unstable coalition.

Turkey faces a challenging foreign policy environment amidst heightened regional tensions and rising external security risks as the government attempts to cement its role as an economic and political power in the region.

A collapse of the government's ceasefire with the Kurdish separatist PKK is a major step back for the country, weighing on growth potential.

The AKP will seek to maintain a relatively conservative fiscal policy, although this will become increasingly challenging due to higher borrowing costs and lower medium term growth potential.

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While the government's debt load is low by regional standards, the private sector's rampant external borrowing in previous years has greatly increased macroeconomic risks.

Despite cheaper oil, Turkey's current account deficit will remain large and a major macroeconomic vulnerability. Turkey will remain reliant on short-term foreign capital inflows to cover the sizeable current account shortfall, leaving it prone to tightening global liquidity and shifts in international risk sentiment.

A dovish central bank will keep inflation above target and ensure a volatile growth trajectory.

Turkey's investment grade sovereign credit rating is increasingly at risk.

Major Forecast Changes

We now forecast real GDP growth of 2.2% and 2.7% in 2015 and 2016 respectively, from 2.8% and 3.5% in our last quarterly update.

The Turkey Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Turkey. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Turkey's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI  Research.

Key Uses

* Forecast the pace and stability of Turkey's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Turkey's country risks against regional peers using BMI's country comparative Risk Index system.
* Evaluate

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