European debt crisis knocks Turkey’s door

ISTANBUL / FRANKFURT

The main opposition CHP’s leader Kılıçdaroğlu urges workers to stand up against the government for their right as Deputy PM Bozdağ (L on screen) and Labor Minister Çelik is listening. DAILY NEWS photo, Selahattin SÖNMEZ

As eurozone leaders started a “make or break” summit in Brussels yesterday, the Turkish economy received stark warnings about a possible spillover from the ongoing debt crisis.

The International Monetary Fund (IMF) on Dec. 7 predicted economic growth of just 2 percent next year for Turkey, providing an assessment that hints at the possibility of a short recession early next year. But Economy Minister Zafer Çağlayan brushed off the pessimistic review, saying the IMF would have to revise its projections.

However, a similar warning came yesterday from Turkey’s top business organization. “External crises can come knocking on our door at any time,” Ümit Boyner, chairwoman of the Turkish Industry & Business Association, said in a speech that intimated an unsustainable current account deficit. (p. 10)

Hopes for a managed slowdown in the economy were dented yesterday as industrial output continued to grow at a rapid pace. In October, the pace of expansion was 7.3 percent; on a month-to-month basis, the increase was the biggest since December 2010.

Meanwhile, the European Central Bank cut its main interest rate to 1 percent yesterday, displaying its concern for the health of the eurozone economy.