A new retail confidence index
Fatih Özatay, PhD
18 January 2010
We can say there is a consensus among economists that in 2010 Turkey's economy will grow at a rate close to long term average growth rate. This will to a large extent be achieved due to the marked recovery of exports compared to 2009, which was a quite unfavorable year in this regard. Positive developments in export performance heard in recent weeks confirm this dimension of the growth scenario. However, the scenario did not maintain an evident recovery in private consumption and private sector investment spending. If these two important components of national income enjoy a recovery before the foreseen period and at a stronger fashion as estimated in the basis scenario, 2010 growth rate can pass beyond the estimates. But is this a possibility given the current indicators?
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Third ‘traditional’ weekend commentary
Fatih Özatay, PhD
17 January 2010
Since we said 'traditional', let it be the third than the first one, so that it goes with the meaning of 'traditional'. With the global crisis, criticisms of chief economists about economic theory have peaked. I am addressing this issue for a while now; I used not to write 'Sunday's commentaries in the past', but it seems that I will develop such a habit at least for a certain while. And this is also a 'Sunday's commentary'.
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What is the meaning of this poll tax?
Güven Sak, PhD
16 January 2010
A regulation for the collection of a certain amount of money per branch from banks will be initiated. State Minister Ali Babacan held a press meeting on Thursday. He insistently responded to questions as to how the extension of SSI premium support and the adjustment benefit provided for the retired will be financed as there is no allocation determined in the budget with this new tax. Radikal daily gave the news with the heading "Poll tax is introduced for banks." This was exactly what happened. So, was this a move in the right direction? Does this poll tax have any meaning? No, it does not. It only means witnessing the prevailing fiscal policy disaster. Period. Let us think on this issue and see what the new tax looks like.
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Back or forth in time?
Fatih Özatay, PhD
14 January 2010
After the rapid rise in October, industrial production increased at a limited rate in November. On the other hand, capacity utilization rate increased considerably in December. These data do not give any new information as to what extent the growth estimations for 2010, which generally vary between 4 percent and 5 percent and sometimes go beyond 5 percent, are realistic. This interval of growth estimate seems as realistic as it was a couple of months ago.
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Are you aware of what we have forgotten?
Güven Sak, PhD
14 January 2010
On his way to Russia, Honorable Prime Minister of Turkey repeated the same thing: "Masallah, you are doing very very well." And like a combatant, who, to those pitying to his bruised eye at last night's fight, says 'you should see how their faces look like!' he added: 'you should see how the others are suffering.' You cannot respond, "No, we have access to the Internet. We know what goes around in the rest of the world immediately." After all, he is the Prime Minister; we do not want to get into trouble. Today, let us not waste time with this "political" (that is, incorrect) findings and address the issues that went down to the drain in the face of the global crisis. This way, we can also preserve our sanity. If you will not be depressed, please keep reading.
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Growth threshold to reduce unemployment
Fatih Özatay, PhD
11 January 2010
Recently, a number of estimations on 2010 growth were made. The common feature of these estimations is that they are all above the official estimate given in the Medium Term Program (MTP). MTP foresees 3.5 percent growth in 2010. Estimates by economists and institutions generally vary between 3.8 and 4 percent. Some even slightly exceed 5 percent.
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Faith in market
Fatih Özatay, PhD
10 January 2010
In the last days of 2009, I mentioned that the economic theory is going through hard times. This is particularly the case for macroeconomic theory which tries to explain how variables like national income, unemployment rate, interest rate, exchange rate or price level are determined at a certain point in time and how do these move in time and whether or not these movements can be altered via economic policy interventions of the state.
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Have you heard about Amazon Kindle?
Güven Sak, PhD
09 January 2010
We might not be aware, but the world is still on a change. I am not talking about the "changes" brought forward to spice up the daily disputes. The world has been changing deep down due to quite structural reasons. And technologic change does not care about any crisis. Question of today is; have you ever thought how Kindle can change the world?
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So, is this how it ends?
Fatih Özatay, PhD
07 January 2010
What was the magic phrase of the program implemented after the 2001-crisis? It was 'fiscal discipline'. In the aftermaths of the crisis, we first had to put off the fire and cool the climate and then implement the measures to prevent the reemergence of the fire. Putting off and cooling the fire referred to disciplining the fiscal policy to prove that budget deficit and public debt will tend to fall and to saving the banking sector which was on the free fall. Then, it was necessary to ensure the sustainability of fiscal discipline, put the banking sector on its feet and implement the radical institutional regulations that will prevent the occurrence of such unfortunate crisis.
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Are you ready for Turkey’s test with the youth?
Güven Sak, PhD
05 January 2010
These are the first days of 2010. The process we are in for a while now somehow reminds me Charles Dickens's "A Tale of Two Cities." Do you remember how the story begins? It reads like this: "It was the best of times; it was the worst of times." It seems that 2010 is most likely to be such a period. I will not be making a political analysis. In contrast, I believe that the "Ankara Tussles" overshadow the real agenda item. I believe that 2010 will be the year for Turkey's test with the youth. Let me explain why.
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