Deficit and revival of past

Dünya Executive - - REPORT -

William Jackson, economist, Capital E.

On a 12-month rolling basis, Turkey’s trade deficit widened to $81.5 billion in January (equivalent to 10 percent of GDP), up from $60 billion in mid-2017. The rise in imports reflects the strength of domestic demand and the economy more generally in recent months. GDP expanded by 11.1 percent year-on-year in the third quarter of last year, and it looks like the economy expanded by around 7.0-7.5 percent yearon-year in the fourth quarter and in the first month of this year. However, the widening trade deficit is also a worrying sign that old problems in Turkey’s growth model are emerging once again. There’s nothing mechanical that means Turkey will suffer the same consequenc­es any time soon.

The economy was hit hard by the financial market dislocatio­n caused by the euro-zone debt crisis in 2011 and the “taper tantrum” in 2013. This time around, the economy might, for example, be vulnerable to a correction in global equity markets or fears about the pace of monetary tightening in the US. have made in the past.

(March 2)

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