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ERDAL SAĞLAM > 2013 growth hopes unhurt by drop in 2012

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The year 2012 is over, but debates about its economic activity are still continuing. Recently, following the release of the 2012 December industrial output data, the overall growth estimate of 2012 was again revised down.

For 2012 growth, the government had targeted 4 percent. However, especially in order to improve the current account deficit, the economic management put the brakes on a little more than originally intended. As a result of this, the growth target estimations were gradually lowered toward 3 percent. Despite the revised growth figures, it is predicted that estimations in the markets will be around 2.7-2.8 percent when the year-end economic activity is reviewed. It is being mentioned that this figure is low.

However, the December industrial output data released last week showed that production that had started recovering in November again fell in the last month of the year. For this reason, market experts have felt the need to again revise down the 2012 growth estimates.

According to last market analyses, I can say that 2012 growth rate estimates vary between 2.2 percent and 2.5 percent. There are still some analysts who have not changed their former estimates of 2.7 percent, but estimates generally seem to have fallen.

There are also interpretations in the analyses of foreign banks and foreign financial service companies, after the latest data, that the 2012 growth rate will end up being a little over 2 percent.

The exact figures will be confirmed with the 2012 last quarter growth rates, which will be announced on April 1, and with the growth rates of the entire year.

2013 targets not changed

While estimates about the year 2012 are constantly falling, there is no concern about the growth figure regarding 2013. It is generally regarded as certain that the government’s target of 4 percent growth will be met this year.

Moreover, with the fall of the 2012 growth rate, the possibility of meeting this year’s growth targets is also increasing, as the base effect would have fallen and even though there may be less recovery, growth rates will thus be higher.

While there are no concerns about meeting the 4 percent target in 2013, it looks like estimates are in fact higher. Indeed, it is too early to say in advance whether or not these estimates will again change; however, we see that the lowest growth estimates in the markets are around 4.5 percent.

We understand from his own statements that the Central Bank president considers normal growth to be 5 percent this year.

As a matter of fact, it is certain that the stance of the Central Bank will play a key role in 2013 growth. As far as we can infer from the stance of the Central Bank administration, economic activity that would exceed the 5 percent growth rate will not be allowed to occur. The stance of Deputy Prime Minister Ali Babacan also shows this.

For this reason, it is observed that Babacan and the Central Bank are sensitive about the rate of increase of credits. They do not want this rate to exceed 15 percent and say they will take measures in the event that it does.

In short, while last year’s growth rate falls, growth estimates for this year are gradually increasing. The efforts toward economic management, though, are intensifying to prevent an extreme increase in growth where it might reach a level destroying economic equilibriums.

February/13/2013

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