Growth not felt

Dünya Executive - - COMMENTARY - Tugrul BELLI Columnist

According to official statistics Turkey’s economy grew by 5.2% in the first quarter and 5.1% in the second quarter. It’s a sure thing the growth rate for the third quarter would be much higher (with the base effect). There may be a slowdown in the fourth quarter, but it can still be said that growth will be at least 5.5% as foreseen in the Medium-Term Plan (MTP), and will likely realize at around 6%. However, (it’s just an observatio­n but) none of the businessme­n I talked to recently, regardless of sector, told me that it’s all rosy in the garden. Even the most positive comments are along the lines of “just getting by.” But in an economy growing by 6% and more, maybe not all but most of the sectors should have been rallying.

It’s important for a middle-income country and a kind of “matured” economy to still be able to grow by around 6%. What I mean here by “matured” is that Turkey is no longer a country with a high volume of foreign fund inflows in comparison with its GDP and it’s no longer a period of high growth maintained by consumer loans and mortgage loans. Under these circumstan­ces, a growth rate of 6% is highly respectabl­e. But this growth is definitely “not felt.”

First of all, such a fast growth is supposed to create a significan­t increase in confidence indexes. But despite a modest recovery among these indexes in comparison with the bottom levels of last year, when compared with the last 4-5 years, the best we can say is that “a volatile trend” is observed.

In addition, workforce statistics and unemployme­nt rates do not match with this growth. The lowest non-farm payroll rate for the last 15 years was seen in June 2012 (9.8% when seasonally adjusted). This year the unemployme­nt rate realized as 13.4% by July. And it’s the same rate as last June. Lastly, let’s have a look at trade figures. Is there a boost in exports for the last couple of years that made us grow at such a fast pace despite the lull in the domestic market? Our exports rose by 5.8% in terms of volume in the period until the start of June. Not bad. But when comparing its ratio to our national income (22%) it’s obvious that it won’t be enough to carry the growth rate up to 6%.

In short, “according to official statistics” the average growth rate for the last five years is almost 6% but we can’t confirm this through other figures or public perception. This being the case, can we say, “Is a growth you can’t feel not a real growth?”

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