Turkey should be alert to inflation risks

The IMF this week upwardly revised its 2011 GDP forecast for Turkey to 8.7 percent from a previous 4.6 percent. It slightly pared its inflation forecast for 2011 to 5.5 percent from a previous 5.7 percent, but raised its 2012 inflation forecast to 6.4 percent from a previous 6.0 percent.

Speaking at a joint news conference with Zoellick, Deputy Prime Minister Ali Babacan said Turkey should prepare for negative scenarios in case the United States and euro zone were unable to resolve their debt crises.

The country is struggling to contain a record current account deficit, which the IMF now forecasts at 10.5 percent of GDP, up from a previous estimate of 8.0 percent.