Tidal waves in the econ­omy

Dünya Executive - - COMMENTARY - Nevzat SAYGILIOGL­U Colum­nist

Tides also oc­cur in economies, as they do in na­ture. But the tide we are ex­pe­ri­enc­ing is a lit­tle bit dif­fer­ent; it is both more fre­quent and the am­pli­tude of its wave is higher. Let me try to ex­plain what I mean and have a look at the de­vel­op­ments over the last two weeks to try to show the sim­i­lar­i­ties with the ‘tide.’

Un­em­ploy­ment fig­ures: Ac­cord­ing to the TurkS­tat bul­letin dated August 15, 2019, un­em­ploy­ment rose to 12.8 per­cent in May 2019 com­pared to the same month of the pre­vi­ous year. How­ever, in some pe­ri­ods, the de­crease in the un­em­ploy­ment rate is per­ceived as a tide.

In­dus­trial pro­duc­tion index: Ac­cord­ing to the TurkS­tat bul­letin dated August 16, 2019, the man­u­fac

tur­ing in­dus­try index de­creased by 4.6 per­cent in June 2019 com­pared to the same pe­riod of the pre­vi­ous year. How­ever, this de­crease was 3.7 per­cent in June 2019 com­pared to the pre­vi­ous month.

So, there was a tide in the in­dus­trial pro­duc­tion index, mean­ing the bad and the lesser evil have emerged.

Eco­nomic con­fi­dence index: Ac­cord­ing to the TurkS­tat bul­letin pub­lished in August 28, 2019, the index, which was 80.7 in July 2019 rose to 87.1 the fol­low­ing month. The course of the econ­omy is thus per­ceived as pos­i­tive, de­spite the fact that the index re­mains in neg­a­tive ter­ri­tory.

The con­sumer con­fi­dence index was 56.7 in July 2019, in­creas­ing to 58.9 in the fol­low­ing month. How­ever, con­sid­er­ing that the index of August 2018 was 68.3, there is a de­te­ri­o­ra­tion this year. But this month, things are re­versed. If we look at th­ese in­dices for a longer pe­riod, it will be seen that the trend is neg­a­tive. Again, a tidal event.

Growth fig­ures for the sec­ond quar­ter of 2019 were pub­lished on Septem­ber 2. Tur­key’s econ­omy shrank 1.5 per­cent in the sec­ond quar­ter com­pared to the pre­vi­ous year. This con­trac­tion con­tin­ued the 2-3 per­cent con­trac­tion in the first quar­ter of 2019 the last quar­ter of 2018.

This means that the de­crease in the last quar­ter is good com­pared to the pre­vi­ous quar­ters, and thus, points to an­other tidal event.

Once again, the 8.1 per­cent in­crease in ex­ports and 16.9 per­cent de­crease in im­ports are presented as a pos­i­tive devel­op­ment and in­ter­preted as tidal.

In­fla­tion fig­ures: CPI pub­lished by TurkS­tat last week in­creased by 0.86 per­cent in August com­pared to July. There­fore CPI has been 7.35 per­cent in 8 months of 2019 and 15.01 per­cent com­pared to the same month of the pre­vi­ous year.

Of course, due to the higher in­fla­tion rate in the pre­vi­ous months, this in­crease is also seen as a tide.

Can you imag­ine, even the five im­por­tant eco­nomic in­di­ca­tors of the last 15 days re­veal a tidal phe­nom­e­non. The fig­ures that are more pos­i­tive than the pre­vi­ous ones are sub­ject to tweets with a fes­tive air by most of­fi­cials.

Then, re­sults or per­cep­tions change ac­cord­ing to who is look­ing at it and in terms of which time­frame. The eco­nomic course re­sem­bles a blind man’s de­scrip­tion of an ele­phant.

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