Tidal waves in the economy
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.