Data releases on inflation and economic activity since the inception of the cycle of rate cutting and the favorable course of risk indicators have vindicated these preemptive monetary policy decisions and strengthened the impact of policy decisions on expectations, gradually bringing market interest rates down to historically low levels (Figure 13). The Central Bank assesses that the decline in market interest rates is also attributable to policy rate reductions, as well as maintaining flexibility in interest rate decisions in favor of a downward bias and the recovery in risk perceptions in the second quarter of 2009. The downward trend in market interest rates also reverberated on medium term real interest rates causing real market interest rates to go down compared to the first quarter and to follow a course below the levels of the pre-crisis period (Figure 14). Notwithstanding the fact that a decline in real interest rates in periods of stagnation is an anticipated change in healthy economies, I would like to underline that this has never been witnessed in the Turkish economy before. In this regard, the current level of real interest rates is considered to be a favorable development as it verifies that the Turkish economy is on the path of normalization.
Forecasts for Annual Growth 2009  2010  Previous Forecast  New Forecast  Previous Forecast  New Forecast  World  -1,3  -1,4  1,9  2,5  Developed Countries  -3,8  -3,8  0,0  0,6  USA  -2,8  -2,6  0,0  0,8  Eurozone  -4,2  -4,8  -0,4  -0,3  Developing Countries 1,6  1,5  4,0  4,7  IMF  OECD All OECD Members  -4,3  -4,1  -0,1  0,7  USA  -4,0  -2,8  0,0  0,9  Eurozone  -4,1  -4,8  -0,3  0,0  World  -2,1  -2,6  1,9  2,1  USA  -2,7  -2,6  1,8  2,1  Eurozone  -3,4  -4,4  0,3  0,4  Consensus Forecasts *  Source: IMF World Economic Outlook, April and IMF World Economic Outlook Update, July. OECD Economic Outlook, Interim Report, March and OECD Economic Outlook, 2009/I, June. *Consensus Forecasts, April and Consensus Forecasts, July. In sum, assessing domestic and external demand developments together, revised forecasts for medium-term inflation are based on a framework where aggregate demand conditions would support disinflation for a long period of time. Distinguished Guests, Despite the realization that recovery in the global economy will be slow, increasing perceptions regarding the worst part of the crisis being over caused a rebound in commodity prices.