We grew, but at what pace?
The data from the Turkish Statistical Institute (TurkStat) is in: We grew by 7.3 percent in the last quarter of 2017 and by 7.4 percent for the whole year. The predictions were around these levels.
The data for the first three quarters were also revised: 5.3 percent for the first quarter was revised up to 5.4 percent; 5.4 percent for the second quarter remained the same; and the record growth rate of 11.1 percent for the third quarter was revised up to 11.3 percent.
But we should be careful a couple of reasons. For one thing, these data points belong to one year only. When you talk about the growth rate, you should consider it from a wider perspective.
Secondly, while there is no doubt that we are growing, it’s very important to analyze how growth per person – in other words, income per capita – improves. In fact, it may be even more important than the overall growth rate.
Average growth for 15 years
The Turkish economy grew by 131.26 percent from 2003 to 2017. Based on that, the average growth rate for the last 15 years was 5.75 percent.
The highest growth rate was achieved in 2011 with an annual rate of 11.1 percent. 2004 and 2005 were also impressive years, at 9.6 percent and 9 percent respectively, though the drop of 0.6 percent was part of a larger declining trend over the next five years. Since 2011, we have seen a fluctuating growth rate and that volatility will continue in 2018. After a growth rate of 7.4 percent last year, we will achieve a growth rate of 5.5 percent, if the official target proves correct.
Income per cap ta decl n ng
According to TurkStat data, income per capita was $10,597 last year, and has declined annually since 2013, when it was $12,480. The reasons for the decline are multifaceted but a key factor is population. When calculating the GDP per capita for the last year, the population was taken as 80.13 million. The income per capita was based on this number but when you add about 4 million refugees, that figure goes down to $10,000.