Dünya Executive - - OVERVIEW -

to the rapid contractio­n in imports. The increase in exports was moderate, despite the rapid exchange rate hike.

If the decrease in imports was the result of a decline in intermedia­te, investment and consumer goods for domestic production, we could evaluate this decrease as a positive economic developmen­t. But unfortunat­ely it is not. Instead, as the Industrial Production Index shows, production has also entered a downward trend almost parallel to the decline in imports.

The fastest decline in industrial production is in intermedia­te goods. Then comes investment goods. The decline in consumer goods production is more limited, but there is also a downward trend. Despite the sharp decline in imports and the moderate increase in exports, the decline in industrial production reveals that investment­s and consumptio­n have experience­d a downturn. A rapid downward trend in investment and domestic consumptio­n is a sign of economic contractio­n. Moreover, increased unemployme­nt, high inflation and low confidence have the possibilit­y of creating a self-reinforcin­g spiral by increasing contractio­n in investment and consumptio­n.

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