As the chaos continues after the election, the first quarter growth data which has been waiting for June 10 in the calendar has been announced. As shown by the leading indicators, as the numbers are also proving that domestic demands are recovering, our economy grew 2.3 % annually in this period. It is important to analyze this view, which I don't find surprising both in terms of level and context.
Then, let's have a look at the epicenters.
The data of Q1 (first quarter) has been announced for most of the countries. When we list it, China, with 7%, follows India which is at the top; just a click below, there are a few rising economies, like Malaysia and Indonesia. If we reduce the speed slightly, in the 3-4% band, we see a few developing countries like Nigeria and Poland. The condensed range on the list is the 2-3% band which we are also in. The economies of the countries like America, Mexico, South Korea, England and South Africa, more or less, differ from ours. Thus, we continue to be modest both in the global environment and in our own caliber.
3 Points from private consumption
After seeing our place from the space, now let's get closer: we grew 2.3%, but how?
Gross Domestic Product (GDP) data say the engine power in Q1 is the private consumption. Having grown 4.5%, private consumption gives the strongest support with 3 points for our GDP. The details show that this is mostly the transportation expenses. As another attention-grabbing group is the health group, it is difficult to talk about a general consumption enthusiasm.
On the other hand, private investment with a little recovery increased 1.9% and contributed to the growth 0.4 points. This came from the machine-equipment expenses growing quarters after, but there is a decline in the construction investments. There is no support from the public sector: As the consumption expenses of the state contributed 0.3 points for our Q1 speed, public investments had a minus 0.4 point effect.
Foreign demand is leaving us
Let's also have a look at the foreign demand: geopolitics and economic external developments have been an obstacle in front of being able to realize the potential of our exporters. Our determined export, even if it has soft declines compared to the world-wide existing conjuncture, slightly hampers our growth. Here in this direction, when the 4.1% increase in the import is added in the 0.3% export decline in Q1, net export in this period pulled down our speed 1.3 %.
This outlook actually appeared in the last quarter of 2014. When the reduction of export in that period united with the domestic demand slight movement, the foreign supported view throughout the year shifted the balance domestically. This continued in 2015 Q1 too and we grew with the domestic demand.
Finally let's see the sectors taking a look at the supply side: data underlines that the biggest support in Q1 came from the finance sector with 0.9 points. Making no progress in the mentioned period, industry did not support the economy. But why? Firstly, the manufacturing industry, the apple of the eye of industry, contributed growth with 0.2 points slightly. Moreover, the mining and construction sectors, which narrowed in Q1, had a negative impact. The recovery in agriculture-which upsetted us a lot last year-is putting our minds at rest.
It is time to say “we”
Besides a view that does not falsify our expectations, actually the critical thing is what will happen next. As the Q2 indicators are giving positive signals on the domestic demand and especially the investments, our favorite, there is slight movement in the industry. In order for all these to be sustainable, there is a need for the reforms we have been planning for a long time. That's why we were looking forward to the new period.
On the other hand, as Turkey is busy with an uncertainty, it may postpone the reforms for a while. However, before the reforms, like establishing a stable and optimistic environment, we face a new necessity which we actually forgot in the past.
At this point, we know that in order not to reduce our tempo in the next periods, we need to spend an extra effort. However, risks may emerge due to instability: The most prominent of these is losing confidence and the other one is the interest.
On the other hand, if the domestic uncertainty strengthens, the USD, which has been on the rise for a while with the FED process, can hit with another effect.
The foreign press and the known corporations have already started brokerage of these risks.
From these facts, as I had underlined in my previous article, we should urgently find the shortest secure way to achieve stability. That's why; we need a national approach which is above the parties.
That's why; from that direction the constructive call in President Erdoğan's speech yesterday is quite meaningful: Now it is time to say “we”…
However, as the country, we cannot give up our determination for the goals we set.
To be able to run towards a strong future, first of all, we need a firm ground. I hope that by acting with the common mind and feelings, we can step on firm ground as soon as possible.