Turkey passed through a recovery period, in means of economic aggregates since the economic crisis period of 2001. GNP scored a growth of 48% in the last six years and the inflation declined from a level of 70% to single digit levels. The economic success stemmed from the high discipline in the fiscal policy and the tight monetary policy practiced during this period.

Affects of the mid 2006 fluctuation and subprime credit crisis of 2007 diminished the GDP growth rate to 4.5%in 2007, from an average of 7.2% through the 2002-2006 period. 2007 has been the first year of looser fiscal discipline after the period of 2001 crisis, mainly because of the 2007 general elections. Although the EU and IMF anchors has been supporting the economic developments, there has also been a slow down in the economic reform schedule and concerns over the political stability rose. Former economic reforms and the structural strengthening of the financial sector was able to keep the losses at a limited level. But the global concerns surely increased the level of risk, as it has been in most of the emerging countries. Financial markets has been subject to an asset price correction in late 2007 and early 2008 period. What’s more, the high level of the current account deficit and the rising political tension with the court case against AKP, the governing party, rises the country risk of Turkey. 

Global expectations of a slow down and even a recession in the US, and the afterwards affects leading the World into economic difficulties, indicates to a reduction in the global liquidity and risk appetite. Turkey, having a strong financial system is subject to lower risks in comparison with the 2001 and former periods.