Strong credit expansion, real currency appreciation, rising oil prices and strong domestic demand growth caused Turkey's current-account deficit to rise from a six-year low of 2.3% of GDP in 2009 to 6.6% in 2010. We expect similarly large deficits of 7-7.5% of GDP in 2011 and 6-6.5% in 2012-13 as credit growth will slow only gradually and import demand will remain strong. We also expect oil prices to ease only gradually from around US$100/barrel (dated Brent blend) and fiscal tightening in the EU, Turkey's largest market, to dampen demand for Turkish exports. In 2014-15 a slight improvement is forecast as we expect export demand to recover gradually and international oil prices to ease. However, the deficit will still be large at 5.5-6% of GDP.