This post is the second of a series – 12 for 2012 – that beyondbrics is running on key emerging markets topics for the coming year.

By Murat Üçer

Thanks to ample external financing and lots of government-backed economic stimulus over the past two years, Turkey’s output is some 10 per cent higher than pre-crisis levels. For sure, this is something to boast about.

But at the same time, the current account deficit has soared from around 6 per cent of GDP to 10 per cent and inflation is at 10 per cent. The authorities have tried to manage the boom with some controversial and complex tools over the last year, notably unorthodox monetary policy. But if Turkey is to avoid more trouble ahead , a stronger and more orthodox policy response is needed as soon as possible. Continue reading »