Turkish Economy Turns Forecasts Upside Down
TURKEY (Dispatches) - With the July 15 coup attempt, perpetrated by Gülenist Terror Group (FETÖ), Turkey was subjected to a major act of terror that many would have deemed impossible in the 21st century.
At the time, Turkey was one of the only five countries that achieved successive positive growth for 27 quarters, thanks to its macro prudential measures, whereas the global economic system has been struggling to recover from the 2008 financial crisis.
Having successfully grown by 8.5 percent in 2013, 5.2 percent in 2014, and 6.1 percent in 2015, Turkey sustained its position among the nations with high growth performance in the first two-quarters of 2016 (4.8 percent and 4.9 percent).
The failed coup attempt, however, disrupted that series of positive growth and the country’s economy contracted by 1.8 percent in the third quarter.
Following the coup, the government moved into the rescue with a series of new economic measures, similar to those taken to offset the effects of the 2008 global financial crisis. Eventually, the Turkish economy growth returned to positive figures in the fourth quarter of 2016 with 4.2 percent.
However, by the end of 2016, the International Monetary Fund (IMF), World Bank (WB) and Organization for Economic Cooperation and Development (OECD) as well as international credit rating agencies and financial institutions all forecasted that the Turkey’s growth would remain under 3 percent in 2017 while some of them even predicted it would be below 2 percent.
The Turkish economic administration entered the New Year with the restructuring of a Credit Guarantee Fund that especially supports small and medium sized enterprises (SMEs), similar to the one in South Korea.
The country bounced back to achieve 5.2 percent and 5.1 percent growth in the first and second quarters of 2017, with notable improvements in bank credits, construction investments and in export volume.
Leading indicators show that the growth in gross domestic product (GDP) may even reach 7 percent in the third quarter, putting Turkey on par with China and India.