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    Seventeenth biggest
    Fatih Özatay, PhD 13 July 2009
    Automotive sector market data for June was announced. Now it is time for intellectual monitoring. Tax cat was implemented for the automotive sector effective as of the mid March. It is obvious that the mentioned sector is important for Turkey in particular when considered together with its sub-industry. A slack in the sector affects the economy as a whole. Despite the importance of the sector, however, I argued immediately after the implementation of the tax cut that the decision is wrong. Because, we exported a large proportion of the automobiles we produced. The decision however had no effect on export prices. On the other hand, a significant proportion of the automobiles sold within the country were imported. The decision led to a reduction in the prices of imported cars as well. In tha [More]
    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]
    Everyone learns his own lesson
    Güven Sak, PhD 11 July 2009
    Turkey is in a rapid transformation process. The point to be emphasized considering the change is: Changes does not happen under military discipline designing each step in advance. The process must certainly contain a flavor of surprise.  Unfortunately, it is impossible to go through a change without encountering undesired outcomes. In social sciences, it is not possible to see the past and the future simultaneously and say "Now we entered the fourth phase of the plan". When human is involved in the picture, a small mistake in initial conditions can push the system off the track. So, what do we have to do? It is quite simple: We have to not follow each detail second by second. We had better to make the assessment considering the process as a whole.  Today, let us discuss how Turkey can eva [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]
    How does risk appetite rise in the world we know?
    Güven Sak, PhD 09 July 2009
    If Adam Smith made a short visit to the world; wouldn't he think that the prophecy the stated around two hundred years ago was coming true? Yes, he would. What was that he said? He has foreseen that West's advance through the East which seems to be the misfortune of the east will result in the East's strengthening. The outcome would be the equalization of powers. Is this exactly what has been happening nowadays? Is it a head becomes foot, foot becomes head situation? Oh my God, or is the world we know coming to an end? Maybe this must be the question of the day: How does risk appetite rise in the world we know? [More]
    Why are they more pessimistic now?
    Güven Sak, PhD 07 July 2009
    Is it because the wind now blows more rapidly? Or is it because suddenly clouds coated the sky? Is it because the news started to be worse? Or is it because analysts were suddenly surged up with pessimism? Or is it because "the steps taken proved unsuccessful"? We do not know yet. But one thing is apparent: the weather is turning around for the last month. More and more adverse news has been covering the air. The green shoot talks of yesterday that "pretended everything will suddenly be all right tomorrow" is replaced with a more pessimistic climate. Of course this does not have a direct relation with Turkey yet. However, it anyhow is related because there are things to do. Today let us make an assessment on the current state of affairs. [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]
    Can we focus on our work if we hold the elections right away?
    Güven Sak, PhD 02 July 2009
    We put our signature under another global "success" story. Turkey's economy has broken the world record of economic contraction in the first quarter of 2009. Contraction is a problem all around the world in this period; however no one has experienced such a significant contraction. Besides, there are economies that without a shame experienced growth in the first quarter of the year. So, why did Turkey encounter such a result? The relative stability ensured by the program implemented after the 2001 crisis coupled with the Customs Union agreement rapidly turned Turkey into an integrated part of the global economy. Now, however, we seriously feel the contraction. We wanted to be and become world citizens; and now we are paying the penalty. Doubtlessly, the rapid contraction in the European ma [More]