Why were we affected this severely?
Table 1 gives the difference between estimated 2009 growth rates and average growth rate for the last four decades for certain countries. Those countries were not selected randomly; in the first group are developing G-20 countries. In addition, three large Central and East European economies are also included. The last raw gives the average of the figures. 2009 growth estimates were taken from World Economic Outlook report o the IMF.
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Table 1: 2009 growth rate in comparison with potential growth rate |
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Argentina Brazil China India Indonesia Korea Mexico Russia Saudi Arabia South Africa Turkey
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-3.5 -3.6 -2.1 -0.5 -1.1 -9.4 -9.8 -8.1 -2.5 -3.7 -9.5 |
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Czech Rep. Hungary Poland Average |
-5.7 -5.0 -3.0 -4.8 |
Figures in the Table are obvious enough, but let me underline two points. Four countries were affected by the crisis quite deeply: Mexico, Turkey, Korea and Russia ranked by most severely affected to lesser severely affected. These countries are followed by the Czech Republic, but the way of being affected is quite different then the first group. The same conclusion can be drawn also when it is compared with country averages. To put it differently, there are no slight differences between countries; these four countries can easily be differentiated from the rest.
As of the end of 2007, most of the macroeconomic indicators for Turkey appear healthy. Public debt decreased significantly, public budget is almost balanced, financial sector does not have any fragility, inflation rate is low and Central Bank foreign exchange reserve stands at a historically high level. Moreover, indicators determining the confidence in the economy reveal that confidence is higher than the past: bankruptcy risk is quite low; borrowing maturities are long, real interest rate is high and real sector confidence is solid.
This commentary was published in Radikal daily on 08.11.2009
