Turkey stays ahead of the pack

After the positive result in Sunday’s referendum on constitutional reform, Turkish markets received a further piece of good news this morning in the form of stronger than expected Q2 GDP data. In response, we have nudged up our growth forecast for this year to 7.5% (from an already above consensus 6.5%). Growth is likely to slow next year, perhaps to around 4%. But a widening current account deficit raises the prospect of a much harder landing should the global economy slow more sharply than we expect.