When Turkey’s growth story comes to an end...
The figures made public yesterday show Turkey’s growth story has come to an end. The fact this story came to an end in a period when emerging markets like us are expected to face difficulties due to global developments means the problems expected in the economy will increase.
A drop in growth in an economy which needs foreign resources due to a deficit of savings will lead to a drop in the amount of sources coming from outside.
Therefore, either there will have to be consent for growth in smaller ratios or there will be an effort to force growth in the economy despite scarce resources.
If the option of forced growth is taken due to the upcoming elections, then the risk of fractures in the economy will increase highly if not until the elections, then definitely after the elections.
The 2014 growth ratio was 2.9 percent, according to the statement released yesterday. There were expectations for this number to be 2.7 or 2.8 percent. The fact that it was higher than expected seems to stem from an increase in stock sales in the last quarter of last year. The total national income was revealed yesterday as well. The total national income created by the Turkish economy by the end of 2014 amounted to 1.75 trillion Turkish Liras.
Yet dollar-based national income per capita has gone down. If we consider this was calculated by taking into account the rise in the population as well as changes in the foreign exchange rates, we can see clearly the damage done to the economy by fluctuations in the foreign exchange rates.
In dollars, total national income amounted to $800 million while national income per capita amounted to $10,404. The fact there has been a drop from $10,822 per capita in 2013 shows the nation has started to become poor.
The picture is getting worse
If we are to look to all the developments in 2014, a 1.8 percent contribution to growth came from exports, 0.9 percent came from private consumption spending and 0.5 percent came from a rise in public spending. The share of investments was negative 0.3 percent. The rapid rise in domestic demand made of consumption and investments, which were 5.1 percent in 2013, went down to 1 percent in 2014.
This data is important because we can better analyze the growth in 2015 by taking it into consideration.
We can say 2015 will be worse than last year as far as growth is concerned, because there has been a serious shrinkage in exports and this has started to reflect itself in the figures. We will see a rise in public spending due to the upcoming elections but still it is seems difficult to balance the growth rate with an increase in domestic demand.
If a rise in domestic demand is forced too much, then the rise in inflation and exchange rates can accelerate.
Even ministers say the growth ratio in the first quarter of the year has dropped to 1.5 percent, which means this is proof of the difficulties we will be facing.
The figures made public yesterday show we are heading toward a bottleneck in the economy. It is obvious Turkey needs a new vision...