The Turkish economy will probably grow 4.5 percent in 2010, according to research by Bank of America-Merrill Lynch. “If the real interest rates continue to be around 4 to 5 percent, then Turkey has a huge growth potential and it can be the next Brazil,” said Türker Hamzaoglu, a Merrill Lynch economist for emerging economies in the Eastern Europe, the Middle East and Africa, or EEMEA, region, in a press conference in Istanbul on Thursday. “Brazil saw huge growth after the 2001 crisis. Maybe Turkey does not have valuable underground resources, but instead of this, it has low real interest rates,” Hamzaoglu said. Another advantage of Turkey is its strong banking system and a large upside potential on mortgages, according to Hamzaoglu. In the long run, South Africa, Saudi Arabia and Turkey are “likely to be success stories,” Hamzaoglu said. “When we compare these to European countries demographically, we see that competitiveness is [robust] in EEMEA countries. The young and unsaturated population in developing countries has potential. Turkey should make use of this.” Hamzaoglu also said the budget deficit situation is improving in Turkey. The gap, which stood at 6.5 percent of the gross domestic product this year, is expected to decrease to 5.6 percent of the GDP in 2010, he said. “The recovery will be seen more effectively in Turkey, as the indebtedness rates of households are lower compared to other EEMEA countries,” Hamzaoglu added. Household debt in Turkey is 13 percent of GDP, according to the report. From now on, Turkey does not need to sign a standby deal with the International Monetary Fund, Hamzaoglu said. “Emerging economies are recovering. There is no need for a standby.” Inflation in EEMEA economies will stand at current rates or even decrease, according to the Merrill Lynch report. The U.S. finance giant predicts the global economy to grow by 4.3 percent in 2010, with consumer spending and borrowing expected to rise as the threat of unemployment wanes and household incomes recover. “The surprise of the year may be a rally in the U.S. dollar,” said Bill O’Neill, a portfolio strategist at Merrill Lynch Wealth Management for Europe, Middle East and Africa. “Brazil, Russia, India and China [or BRIC] currencies have the upside versus the euro.” The U.S. dollar has lost 4.8 percent against the euro this year.