In many countries (especially in the EU), it can be observed that even though it has been 10 years since the 2008-2009 global crisis, the recession created by the event hasn’t been overcome as of yet, and unfortunately many countries have exhausted their arsenals in their fight against it (especially with regards to monetary policies).
This being the case, we should revise the economic forecasts made in the previous years.
In this respect, the estimation of growth for the year 2020 in developed countries made by the World Bank in 2018 was downgraded from 2,2 percent to 1,6 percent.
The -0,6 percent revision made for the year 2020 also means that 2019 isn’t going to be all that bright for developed countries.
That is to say, while it was projected that the global economy will have a growth rate of about 3 percent before, now it has been revised to 2,9 percent.
Behind the revision of the downgrade lies developments such as the trade war started by Donald Trump, between the U.S. and China, the ambiguous Brexit process for Britain, and, with the expansion of Trump’s trade wars into EU countries, the decline of the growth rate of Europe’s most important country, Germany.
Moreover, the budget and debt crisis Italy is going through, the recession of Chinese economic growth after its decision to move from a growing economy based on exports and investment to a sustainable and self-sufficient economy as a result of the trade wars, and the political developments in France are other issues that have caused global economic growth’s downturn.
Finally, after the growth figures of Africa, which used to make up the low growth performances of developed economies, remained below the expectations, there remained no savior for global growth.
In short, in light of these developments taking place in the above-mentioned countries, even though it will not be a year of recession, 2019 gives us clues that it is going to be a year in which global economy will slow down.
The same gloomy atmosphere is also mentioned by the International Finance Corporation of the World Bank.
This is the case in the developed world, however the projections for developing countries don’t look so pleasant either.
With the slowing down in the global economy taking place, it is expected that the developing countries markets will be under great stress.
In light of these developments, the former average growth estimations for developing countries were revised from 4,7 for the years 2019 and 2020 to 4,2 percent for 2019 and 4,5 percent for 2020.
The outlook for Turkey is almost the worst among developing countries after Argentina.
Because the growth forecast for Turkey was decreased from 4 percent to 1,6 percent for the year 2019. The expected growth is even below the figures of the developed countries.
Besides the forecasts of international institutions (which I think are exaggerated) the numbers targeted by the Yeni Ekonomik Program (New Economic Program) are also unfortunately below average numbers of the developing countries (2,3 percent for 2019 and 3,5 percent for 2020).
In summary, the year 2019 is expected to be a dark year for Turkey as well as the global economy.
On the other hand, the actual debate is the potential recession the world’s economy might enter and whether this possible recession would harm the economy as much as the crisis of 10 years ago.
If we add the extreme climate events on top of all these developments, poverty may exacerbate and spread as food prices go up.
Under this tense atmosphere, developing new relations is very important.
The increase in qualified human capital, the international monetary-financial and trade policies (giving an end to the trade wars), the establishment of coordination between economies all appear to be the main way out in overcoming global problems.