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    Latest developments
    Fatih Özatay, PhD 12 July 2009
    On Friday capacity utilization rates for June were announced. The figure indicates a lower capacity utilization rate than the same period last year. However, it is necessary to express that there can be observed a recovery in the rate of deterioration. If we assess it by quarters; capacity utilization rate has fallen by 11.2 percent compared to fourth quarter of 2008. The said rate is recorded as 16.1 and 12.2 percent in the first and the second quarter of the year, respectively. And in June, the rate has dropped to 9.6 percent. In this context, this highly unfavorable figure contains a favorable aspect. [More]
    We forget fast
    Fatih Özatay, PhD 09 July 2009
    Latest data confirmed that unlike the expectations things did not get back on track in the second quarter. In June exports have decreased by 32.8 percent as compared to June 2008. In May industrial production have fallen 17.4 percent than the same month last year. Figures for the second quarter imply a relative recovery compared to the first quarter; but after all we are talking about large rates of downward movement. It is not a joke! 17 and 33 percent falls are quite serious. Turkey's economy was among those that contracted most rapidly over the first quarter. A number of comparative tables took place in the media.  The reasons why Turkey is rising to the peak in the league of economic contraction started to be questioned more frequently. The starting point of the questioning is: It is s [More]
    Adding fuel to the flames
    Fatih Özatay, PhD 06 July 2009
    For the last two articles I have been mentioning how being stuck with economic policies offered in the first chapters of economics textbooks direct Turkey to mistaken policies. In fact, this is a familiar theme for those regularly watching this column. The story always comes back to this issue. [More]
    Scenario of spinning (2)
    Fatih Özatay, PhD 05 July 2009
    My basis economic scenario for 2010 and 2011 was the scenario of 'spinning'. On Thursday I briefly touched upon why it is most likely that the economy will spin: Level of foreign funds to flow toward countries like Turkey would be low. Recovery of foreign demand and thus of exports would take time. In the dawn of elections high rate of unemployment increased the risk of implementing inconsistent panic decisions. Though it was 'time to say something new', design incapacity could be expected to make us be stuck at the 'old'. [More]
    2010 and 2011: Scenario of spinning
    Fatih Özatay, PhD 02 July 2009
    National income figures for the first year of 2009, for which everyone expected a serious contraction, has been announced last Tuesday. Figures were as expected: economy contracted by 13.8 percent compared to the same period last year. The said contraction was encountered despite the significant rise in public spending and investment. [More]
    Growth rates in 2009 and 2010
    Fatih Özatay, PhD 29 June 2009
    Growth rate for the first quarter of 2009 will be announced this Tuesday. The announcement will not involve anything new. Everyone knows that the figures to be announced will indicate a significant contraction in the economy. What is more, expected rate of contraction is a two-digit figure. Therefore, the important thing is what is going to happen from this point onwards. [More]
    Others’ crises, our crises
    Fatih Özatay, PhD 28 June 2009
    We have been spinning in terms of economic policy to a certain extent since 2006 but more prominently since 2007. For instance in 2007 public budget deficit started to go up and rose further in 2008 as local elections were near. We did not encounter the global crisis at an advantageous position. [More]
    Misfortune for us, fortune for monetary policy
    Fatih Özatay, PhD 25 June 2009
    With respect to the global crisis, it appears that the worst part is most likely over. With respect to employment and growth, however, it becomes apparent that the recovery will take quite long. In particular for emerging market economies where level of savings is not sufficient and therefore investments and thus growth rate cannot be scaled up at the desired level, this problem is expected to intensify. To compensate for the insufficiency of domestic savings, it is necessary to use savings of "the others". And the savings of the others refer to 'international capital flows'. Institute of International Finance (IIF) recently announced new estimates on capital flows. Capital flows toward emerging market economies attained a record high with 888 billion dollars in 2007. This amount dropped t [More]
    Correct policy, wrong outcome
    Fatih Özatay, PhD 22 June 2009
    There is a consensus among most economists on the future of the global crisis: we left the worst part behind. The disagreement is about the pace of the recovery to be observed. Since the worst part is most probably left behind, it is now time to discuss the 'period before the worst part'. Let us begin with monetary policy. [More]
    Non-performing loans
    Fatih Özatay, PhD 21 June 2009
    The second set of measures announced this week was directed to credit cards. As per the new decision, debt of the credit cards which turned to be non-performing after May 31 2009 will be restructured if the owner of the card applies to the relevant bank within 60 days. As a result of the structuring, high penalty rate enforced as of the date the debt of the user becomes non-performing is deleted, interest rate for the debt is recalculated based on the deposit interest rate and the debt is subjected to an installment plan. [More]