Foreign trade figures and growth
Fatih Özatay, PhD
02 February 2013
Recent developments did not alter the 4 percent growth forecast for 2013. Foreign trade figures for 2012 were released on Thursday. In line with the global circumstances, export growth weakened significantly overall in 2012. Non-gold exports increased only by 4.3 percent in 2012 against 17 percent average growth over the 2010-11 period.
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The Shanghai Five
Fatih Özatay, PhD
31 January 2013
As our ancestors have successfully explained, the rotten apple injures its neighbors The Shanghai Cooperation Organization (SCO), originally called the Shanghai Five, was established by Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan. Later, Uzbekistan joined the SCO. I have to admit that I haven’t heard of it until today. Anyways. The GDP per capita of these countries in proportion to that of the US are as follows: Russia: 33.2 percent, China: 20.4 percent, Kazakhstan: 26.9 percent, Kyrgyzstan: 4.9 percent; Tajikistan: 4.0 percent, and Uzbekistan: 6.3 percent. The ratio for Turkey is 29.8 percent.
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Initial figures on 2013
Fatih Özatay, PhD
29 January 2013
The fact that no evident recovery was observed in the fourth quarter of 2012 does not endanger the expected 4 percent growth rate in 2013 Last week two important data, capacity utilization ratio and real sector confidence index figures for January were released. As you might remember, I stated earlier that industrial output growth in November being high did not necessarily imply a strong recovery in the fourth quarter of the year. Other indicators, capacity utilization ratio for December among these, did not validate such recovery. Besides, the change in original series rather than that in the generally-misleading seasonally adjusted series, put into question the argument on a possible recovery.
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Growth constraints and shopping lists
Fatih Özatay, PhD
26 January 2013
Certain items on Turkey’s “shopping list” can make sense only in combination with complementary factors. Average GDP per capita growth was higher in Turkey in the first decade of the 2000 than in the 1990s. Turkey therefore has made certain progress in the convergence with advanced economies in terms of GDP per capita. Nonetheless, this marks a limited improvement as some developing countries achieved much higher growth rates and a stronger convergence. Besides, Turkey’s GDP per capita is still 30 percent of that of the US, also proving that the growth performance is not sufficient.
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The latest CBT decisions
Fatih Özatay, PhD
24 January 2013
The CB is determined to take stronger steps if the rise in credit growth rate continues and tends to turn permanent. The Central Bank (CB) Monetary Policy Committee convened last Tuesday and announced decisions after the meeting: the policy rate which has largely lost its meaning since 2011 was not changed. The upper and lower limit of the interest rate corridor was decreased by 25 basis points, while required reserve ratios were raised slightly for both lira and FX deposits.
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The BRICs and Turkey (5)
Fatih Özatay, PhD
22 January 2013
The picture is quite clear for Turkey: it cannot sustain the recent economic performance unless the mentioned conditions change. This is the last commentary of the series which compared the BRICs (Brazil, Russia, India and China), Turkey and South Korea in terms of major economic indicators. Here are the results:
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Growth accelerations
Fatih Özatay, PhD
19 January 2013
Achieving high growth rates is not a rare phenomenon. There is a study released in 2005 on this issue (the details f the study are given below). The authors examine the cases for rapid acceleration in economic growth which lasted at least eight years. They differentiate these episodes from typical takeoffs after economic contraction. The episodes they analyze mark an increase in per-capita growth of 2 percentage points and a post-acceleration growth rate of at least 3.5 percent a year sustained for at least eight years.
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The BRICs and Turkey (4)
Fatih Özatay, PhD
17 January 2013
Turkey cannot sustain the recent high growth performance unless it makes a breakthrough in overcoming the major bottlenecks. The last time I cited a quite recent study. According to that, countries that jumped their GDP per capita with a strong growth performance over a long time were unable to sustain high growth rates. The analysis of the periods of rapid growth starting in the 1950s showed that the high-growth trend halted as respective countries reached GDP per capita of $10,000 and $15,000. And GDP growth rates decreased remarkably then. This study uses a database which is often cited in this type of studies: the Penn World Table developed by the Center for International Comparisons at the University of Pennsylvania. The data for 2010 was recently released. According to this, Turkey’s
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The BRICs and Turkey (3)
Fatih Özatay, PhD
15 January 2013
Its “seventh-grade dropout” adult population coupled with low savings and investment rates do not depict a bright picture about Turkey’s future. Having a high domestic savings rate is critical so as to raise investments and thus to attain high GDP and per capita income growth rates for a considerably long time frame. For a permanent rapid growth trajectory, however, elements to enhance productivity levels also should be in the work. In terms of domestic savings, Turkey has the lowest rate among the BRICs and Korea. China, India and Korea that have attained stunning growth rates in the recent era not surprisingly have high savings rates.
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The BRICs and Turkey (2)
Fatih Özatay, PhD
12 January 2013
China, India and Korea will be able to initiate major investments without borrowing from abroad for a longer time. Last Thursday I compared the BRICs (Brazil, Russia, India and China) economies with the Turkish economy. Figures revealed that Korea has the highest GDP per capita. Korea was followed by Turkey and Brazil while China remained at the top among the rising economies. Korea and India had strong GDP growth rates though not as high as China’s. In other words, if they China and India can maintain the current pace of growth we should expect that they will soon outperform Brazil, Russia and Turkey concerning GDP per capita, unless the latter group initiates a leap.
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