Fund management

ALONG the Bosporus in Istanbul, the deluxe restaurants and discos are packed and the mood is decidedly upbeat as the glitterati down champagne and belly-dance the night away. They seem unfazed by a stream of bad news about the Turkish economy. Figures released this week show that the budget deficit increased thirteenfold in the first six months of 2009. Foreign investment fell by half in the first five months of the year. One in four youths are now unemployed. To crown it all, GDP shrank by a record 13.8% in the year to the first quarter, putting Turkey among the economies worst hit by the global recession (see chart). The IMF expects the economy to contract by 5.1% this year, after registering average annual growth of 6% in the past six years.