ANKARA, Nov 25 (Reuters) - Turkish economic growth is expected to fall to 3.3 percent in 2008 and 1.6 percent in 2009 before recovering to 4.2 percent in 2010 in line with the global recovery, the Organisation for Economic Cooperation and Development said in its Economic Outlook on Tuesday.
Turkey's economic growth has already eased to 1.9 percent in the second quarter of 2008 as the global financial crisis hits its economy after registering growth rates around 7 percent in the last five years.
The government put a 4 percent growth target for 2009, which many economists say is unrealistic at a time of weak consumer demand and sharply slowing exports.
"Growth is expected to fall below 2 percent in 2009, before picking up in 2010 as financial strains ease and the global economy recovers. Risks are on the downside in the short-term, but more balanced in the medium-term," the OECD said.
Like other emerging markets, Turkey has been strongly affected by the international turmoil. The Turkish lira has depreciated, the stock market has fallen and the sovereign risk premium has increased substantially, the OECD report said.
"As Turkey continues to depend on foreign capital to finance its large external deficit and to roll over its external debt, accessing foreign resources may become more difficult and costly in the months ahead. Supporting investor confidence will therefore be crucial," the OECD said.
Serious fiscal drift and political tensions before local elections in March may increase exchange and interest rate volatility, hindering growth and financial stability, the OECD said.
Turkey's government should be alert to support the financial sector, the OECD said.
"If systemic liquidity risks emerge in the financial system, the government should be prepared to introduce contingency support mechanisms to preserve the hard-won stability of the financial sector," it said.
The OECD predicted that total public sector primary surplus, which excludes interest payments on government debt, should stay above 4 percent of gross domestic product this year, at the same level as in 2007, despite the economic slowdown.
The Turkish government's total sector primary surplus target this year is 3.5 percent of the GDP. (Reporting by Selcuk Gokoluk; editing by Tony Austin)