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.

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