The Turkish economy has rebounded strongly from its recent crisis, according to the latest growth statistics.

Turkish gross domestic product (GDP) rose by an annual 8.2% in the second quarter of the year, considerably in excess of forecasts.

The bounce does much to claw back the heavy output falls suffered in 2001, when the Turkish economy contracted by 7.4%.

Last year, the Turkish authorities hiked interest rates in a vain bid to underpin the plummeting currency, as investors were panicked by an increasingly dismal political climate.

Signs of hope

If Turkey has now succeeded in winning back some credibility among investors, it is largely thanks to a $16bn (�10bn) rescue package from the International Monetary Fund, agreed two years ago but thrown into doubt on occasion since.

Politics could still derail any recovery

As well as the money, which has not always been delivered as promptly as Ankara might wish, the IMF has insisted on tough economic targets, notably a 3% growth rate this year and a reduction in inflation from the current annual 40%.

The second-quarter spurt in Turkish GDP should bring the IMF target for the year easily into view.

Spread over the first half of the year, economic growth was 4.7%, comfortably above the government's target.

Stability worries

The Turkish lira, which collapsed spectacularly at the beginning of last year, sparking runaway inflation, has also now started to stabilise.

But a heavy slide on the stock market, down by one-third so far this year, shows that confidence is still low.

There are serious concerns over Turkey's internal political situation, where the disintegrating government coalition looks likely to spark a general election soon.

Externally, too, Turkey's stability is seen as threatened by the build-up to a war on Iraq, its neighbour to the east.