Turkey last week reported a 5% annual growth rate of real GDP for Q1, surprising on the upside. The rate of balance-sheet lending growth by Turkish banks continued to accelerate through Q2, from 17% YOY to 21% YOY. As the accompanying chart indicates, loan growth tracks GDP growth, so the strong lending numbers indicate that Q2 GDP will come in strong as well.

The consensus bottom-up forecast calls for a 25% increase in corporate EBITDA during 2017 and a further 11% rise in 2018, all in US dollar terms. With a forward P/E of less than 9, Turkish stocks still look cheap.