Feza Guler of Ekspert Mumessillik shares his idea and expectations on Turkey’s business for the near future under effects of post COVID-19, as well as consequences of almost 1 year of Ukraine-Russia war and very recent earthquake which deeply saddened and hit the country.
The gross domestic product (GDP), equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time, measures the national income and output of a given country’s economy. With a GDP of roughly US$800 billion, Turkey is admired as the 17th-largest economy in the world. It is a member of the OECD and the G20.
Throughout years, Turkey pursued ambitious reforms and enjoyed high growth rates that propelled the country to higher reaches of upper-middle-income status. However, productivity growth has slowed as reform momentum has waned over the past decade, and efforts have turned to supporting growth with credit booms and demand stimulus, intensifying internal and external vulnerabilities. High private sector debt, persistent current account deficits, high inflation and high unemployment have been exacerbated by macro-financial instability since 2018.
The COVID-19 crisis has also deepened gender gaps and increased the youth unemployment and the poverty rate. The risk of inequalities has also been increasing. The pandemic is expected to have severely negative consequences for Turkey, further weakening economic and social gains.
The Government’s economic policy response to COVID-19 was swift but focused on loose monetary policy and rapid credit expansion. This supported economic activity, but also fueled inflation. Turkey’s economy was one of the few in the G20 and OECD to experience growth in 2020. In the post COVID-19 era, the Ukraine-Russia war has threaded the international trade and supply chains whereas Turkey supports the return to Ukraine of all territory occupied by Russia.
Turkey has been troubled in importing various iron and steel products, wrought aluminum, wheat, coal, natural gas and petroleum oils from Russia as well as troubled in importing semi-finished products of iron, wheat, sunflower, various iron and steel products, and ferro alloys from Ukraine. Both countries are also much important for Turkey’s export markets.
It appears that global rise in food and energy prices exacerbate Turkey’s budget deficit and deteriorate already rising domestic inflation, which in turn hit Turkey.
By the beginning of this year, Turkey was hit by a very big disaster. 11 cities in the south were suffering from a earthquake with a loss of above 50,000 lives which deepened the stress on population of 15 million of people in the region. The earthquake has a very big impact on the soul of the nation and on the frame of economical growth in the country.
Despite of all the negativity of current circumstances, to be optimistic, Feza herewith likes to emphasizes the story of Phoenix (so called ANKA in Turkish) to show how things would hopefully evolve by means of good will and trust in the country and all over the world.
PHOENIX: The phoenix is an immortal bird as cyclically regenerates or is otherwise born again. Associated with the sun, a phoenix obtains new life by rising from the ashes of its predecessor. Some legends say it dies in a show of flames and combustion, others that it simply dies and decomposes before being born again.
Mehmet Feza Guler
EXPERT / Ekspert Mumessillik Ltd. Sti.
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