Turkey

The release of data last week by the Union of Chambers and Commodity Exchanges (TOBB) concerning the size of Turkey's current account deficit produced widespread jitters in Turkey's financial community. With the figures showing year-end targets for the deficit already surpassed, the rosy picture of ever decreasing inflation and consistent growth presented by the government in recent months has begun to look a lot more questionable.

On the divided island of Cyprus, many Turkish Cypriots had been expecting that the end of August would see some major improvements in their lot, with trade and aid promising to kick-start economic growth in their internationally unrecognised state, the Turkish Republic of Northern Cyprus (TRNC). But the first trickle of commerce across the Green Line separating them from their Greek Cypriot neighbours was marred by mutual recriminations between the Greek and Turkish Cypriot authorities over terms and conditions.

The opening of the fifth International Fair for Textiles and Ready-Made Clothing in Ankara on August 19 confirmed Turkey's confidence in textiles as an engine for domestic economic growth. Though Turkish textile producers may be able to stand up to foreign competition at present, local enterprises need to remain nimble footed as pressure from the international marketplace heats up in the coming years.

Even the most enthusiastic of risk-takers wavers at the prospect of doing business in a war zone - and these days, Turkey is feeling this reluctance particularly keenly. Following the kidnapping and murder of several Turkish truck drivers by insurgents in neighbouring Iraq, it came as little surprise when Turkey's transporters' association decided at the beginning of this month to suspend the delivery of goods to US forces stationed there.

Executives in Turkey's tourism sector are likely to have a spring in their step these days. Figures from the Ministry of Culture and Tourism for July have put the country on course for a record-breaking year thanks to an insatiable inflow of foreigners. However, while some analysts argue that Turkey has yet to realise its full potential as a tourist magnet, translating potential into reality can be a tricky and costly task.

Turkish economists can afford a smile or two these days, particularly after last week's meeting of the Executive Board of the International Monetary Fund (IMF) gave the country a qualified thumbs up. Turkey is making good progress under its IMF stand-by arrangement, triggering the release of another $661m loan package. However, while a positive development, this move still highlights the need to address a number of domestic problem areas.