ABSTRACT

With the negative impacts of the recent global financial crisis, several countries are still experiencing a slow pace in their rate of economic recovery. This trend has been consistent since the first quarter of 2009, taking into consideration that financial systems were the most affected. In addition, economic recovery has been fragile due to several reasons. For instance, there have been increased uncertainties on the performance and sustainability of the U.S. economy. Moreover, different country groups have had divergent economic performance which limit of a consistent economic growth. As the monetary authorities strived to stabilize their financial systems, European economies were exposed to increased risk of sovereign defaults and this worsened the rate of economic recovery. Countries such as Turkey were exposed to a fluctuating and weak global economy. However, Turkish economic recovery in 2010 was boosted by increased business and consumer demand, particularly due to monetary easing measures and fiscal stimulus packages. These policies were instrumental in maintaining positive growth in the last four quarters of 2010. As the financial systems continued to stabilize, Turkey was able to record the fastest recovery among European and OECD nations. Its rate of economic growth was one of the highest across the world. Emerging markets were recipient to capital inflows in 2010 especially because of high global risk appetite. Authorities in several developing economies were able to record strong economic growth due to sound financial systems, strong economic growth, high nominal interest rates and prudent public finance management.