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    Unusual certainty

    Fatih Özatay, PhD01 January 2009 - Okunma Sayısı: 1367


    It is a custom that - though I do not know whether it is so, or if it is, why it is so - calculations are made on the eve of the New Year; what was said about the year left and to what extent they were realized and so on. On the last day of 2008, the day I wrote this column, I skimmed over old columns with a bit of hesitation; because, throughout the year I have asked questions meaning 'Who has the control' and criticized the ongoing inertia. Yes, but what did I say throughout the year? What if one says: "You keep on criticizing, but, what about you?"

    Then I realized something which even slightly eased my concerns: I wrote 156 columns in 2008. If you add up the columns on 2008 written on 2007, there are around 160 columns about 2008. Since no one can check them all, I can elect the ones that suit my book. Anyway, as famous anecdotes also say, we are economists; I am sure all columns say "this can happen, but that can also happen".

    However, relying on the scientific honor, I changed my mind and decided not to select the columns that suit my book but review the columns I wrote in 2008 with a more critical eye. It seems that global uncertainties and 'the crisis is about to end' chaos have been reflected in my columns to a certain extent.

    I have set up four scenarios at the end of 2007, the worst one of which has realized. In the column dated December 30, 2007, I had argued that if this scenario considered to be 'less favorable' is realized, growth rate in 2008 will vary between the 2.5-4.5 percent range, unemployment rate will increase rapidly, interest rates will fluctuate between 17 and 25 percent and year-end inflation will rise by 9 to 13 percent (7 to 10 percent for core inflation).

    Therefore, it seems that in December 2007, though I was considerably optimistic about the growth performance, the developments throughout the year have forced me to become more pessimistic. For instance, just a month later, in January 24, I say the following: "...there exists a risk that a series of new turbulences in financial markets might be observed. These turbulences might be extremely strong, as that we observed at the beginning of this week. And it is an even higher possibility that those will have effect for a longer period of time. Turkey will encounter rough times in 2008. These challenges can be limited via the measures we will take. However, the bodies that are responsible for taking those measures keep acting as if they live on another world."

    The column from the week after says: "2008 has started with a low growth rate and an unemployment rate that tends to move upwards... growth rate will fall down. If it is considered that the current growth rate stands around 4.5 percent, we can prospect a fall to 3 percent. In case of new shocks, the growth rate might even fall down further to 2 percent level... we have steps to take to limit the mentioned slowdown. Albeit, due to the reasons I listed in the previous column (incompetence in acknowledging the essence of the reforms and limited ability to design new reforms), I doubt that the potential to act will be obstructed."

    Anyway, in short it seems that I, trying to be cautious due to the big ambiguity observed, I maintained a "2007 was worse than 2002-2006 period. Likewise, 2008 will be worse than 2007" type of style. However, the last sentence in the quotations given in hyphens above remained the same. For some reason, there existed no ambiguity with that respect! I wish you all a happy New Year.


    This commentary was published in Radikal daily on 01.01.2009