TURK­ISH FIRMS HAVE STILL A LONG WAY TO GO TO BRIDGE THE TRADE DEFICIT GAP

Turkish Review - - MICROSCOPE -

hand, the per­cent­age changes in the in­dices are ap­par­ently dif­fer­ent in th­ese two types of as­sess­ment method, hence it can be ar­gued that sea­sonal im­pacts mat­ter for Turkey’s trade and ser­vices sec­tors.

FOR­EIGN TRADE

Firms and en­trepreneurs are re­quired to be suc­cess­ful in Turkey’s do­mes­tic mar­kets in or­der to sur­vive. To be able to ex­pand and ex­tend their busi­ness in­ter­ests and gains, they have to de­velop re­la­tions with the outer world, which is ma­te­ri­al­ized un­der the rubrics of ei­ther ex­ports or im­ports. The cur­rent statis­tics shown in Fig­ure 3 im­ply that Turk­ish firms have still a long way to go to bridge the trade deficit gap, although there is an op­ti­mistic trend dur­ing the last three months. Whereas the trade deficit was around $8 bil­lion in Au­gust 2014, it was ap­proach­ing $6 bil­lion by Jan­uary 2015. How­ever, in or­der to get a clear pic­ture, Turkey needs some time to check whether this trend is sus­tain­able or whether it is a tem­po­rary devel­op­ment due to the im­pact of cur­rency ex­change rates. There is no doubt that firms are try­ing to their best to raise their ex­ports, and that has had an ev­i­dent im­pact nar­row­ing the cur­rent ac­count deficit. Ex­port-friendly poli­cies and in­sti­tu­tions are in­dis­pen­si­ble to achieve this tar­get.

Firms and en­trepreneurs have a sig­nif­i­cant func­tion in the eco­nomic wel­fare of a coun­try. Their choices have an in­flu­ence over the trade vol­ume and pro­duc­tion lev­els of nearly all sec­tors and the fi­nan­cial sys­tem. In a sim­i­lar vein, their po­si­tion­ing in the mar­ket is es­sen­tially cor­re­lated with the strength of mi­croe­co­nomic as well as macroe­co­nomic in­sti­tu­tions in a very com­mon sense. Turkey’s po­lit­i­cal ac­tors should take the psy­chol­ogy of en­trepreneurs and firm own­ers into ac­count to al­le­vi­ate the struc­tural and in­sti­tu­tional weak­nesses of the econ­omy.

This piece fo­cuses on a num­ber of firm/en­tre­pre­neur-re­lated statis­tics re­cently an­nounced by Turk Stat, com­pris­ing eco­nomic con­fi­dence in­dices, industrial pro­duc­tion and trade and ser­vices statis­tics and fi­nally for­eign trade fig­ures. The con­clu­sions com­ing out of the above­men­tioned dis­cus­sions are sum­ma­rized as fol­lows:

• The over­all eco­nomic con­fi­dence in­dex be­gan at 95 in Septem­ber 2014 and ended at al­most 87 in Fe­bru­ary 2015 -- an 8 per­cent re­duc­tion dur­ing the last six months.

• Monthly industrial pro­duc­tion faced ebbs and flows through­out 2014, dur­ing which val­ues ranged from 119 to 123.

• The ap­par­ent in­crease in the turnover in­dex from 137 to 172 puts for­ward a clear state­ment that trade and ser­vice sec­tors do per­form well con­cern­ing the value of their over­all amounts of pro­vi­sion of goods and ser­vices, which is line with the first eco­nomic con­fi­dence in­dex for the ser­vices sec­tor in Fig­ure 1.

• The cur­rent statis­tics shown in Fig­ure 3 im­plies that Turk­ish firms still have a long way to go to bridge the trade deficit gap, although there has been an op­ti­mistic trend dur­ing the last three months. Whereas the trade deficit was around $8 bil­lion in Au­gust 2014, it was ap­proach­ing $6 bil­lion by Jan­uary 2015.

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