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Is it time to worry about fiscal discipline in Turkey?

The Turkish bond market has shrugged off the news that a much vaunted fiscal rule will not now be implemented until 2012 at the earliest. This may be justified since, on its own, a rules based framework provides no guarantee of budget responsibility. But even so, with the current account deficit continuing to widen, Turkey’s medium-term prospects would be best served by a tighter fiscal position.

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