One of the main reasons for the contractionary effects of the global crisis in 2009 was the fall in the demand for Turkey's exports. Steep reductions in Turkey's exports are unique to the global crisis; no such thing was experienced in the 2001 crisis. The recent change in export structure of Turkey also has a role in this.

In periods where market economies grow far below or above the normal growth rates every component of the national income does not move in the same direction. While fluctuations in food expenditures are more limited, spending on durable consumption goods like automobiles and investment goods fluctuates within a wider interval. I guess the reason for this is apparent.

For instance think of periods where the economy grows too slowly or contracts. If you are faced with the risk of losing your job tomorrow, you limit your spending on goods which are not vital and which can be purchased later: "I can use the old TV for some more; there is nothing wrong with it." The same does not apply for compulsory consumption expenditures or that does not apply at the same degree even it does. And in periods of rapid growth the exact opposite takes place.

This type of behavior observed in market economies is also reflected in the export performance of those countries. The main reason for the rapid fall in exports during the global crisis was the fact that half of the exports were directed to the European Union countries. As their economies contracted their demand on Turkey's exports dropped. But this is not the sole reason for the drop in export. Another important reason is that the structure of exports recently changed in favor of investment goods and durable consumption goods.

Table 1 gives the share of different product groups in Turkey's exports. For instance, share of automobiles in total export volume increased from 1.2 percent in 1996 to 6.4 percent in 2007. The same trend can be observed also for transportation goods (trucks, vans and autobuses), the share of which also increased significantly. On the other hand steel-iron products are the main input of this sector as well as real estate sector. And the latter also has an important share in Turkey's exports.

Table 2 gives the annual percentage change in the exports for these groups. The period from the first quarter of 2008 to the last quarter of 2009 is examined. In order to make a healthier comparison, the changes in total exports of Turkey are given in the last column. I believe the points I underlined above can be identified from the tables. Particularly in the period from the last quarter of 2008 to the first half of 2009 the fall in exports in groups other than steel-iron group is significantly above those in other groups. On the other hand the fall in steel-iron exports intensify later on.

Table 1: Shares of some product groups in exports (%)

Table 2. Annual rate of increase in exports for some product groups

This commentary was published in Radikal daily on 25.04.2010