According to data released by the Turkish Statistics Institute (TurkStat), the Turkish economy contracted by 4.7 percent in 2009 over a year before, well below the 6 percent year-end projections in the medium-term program. This is the first time Turkey saw a contraction in its economy following seven years of continuous growth between 2002 and 2008. The International Monetary Fund (IMF) had expected a 6.5 percent contraction in the Turkish economy in 2009. The figures, however, indicate that the economy managed to keep its head above the water despite the global financial crisis, the major factor behind the contraction in the economy. Observers argue that the Turkish economy, now that it has begun to shake off the dust, will enjoy even better growth during upcoming quarters. Upon hearing the gross domestic product (GDP) figures, the İstanbul Stock Exchanged (İMKB) opened the second trading session on Wednesday with a 0.4 percent increase at 56,989.39 points.
Turkey's GDP was TL 953.9 billion ($635.9 billion) in 2009, 0.4 percent higher than in 2008. GDP growth in 2008 was 1.1 percent. For the final quarter of 2009, the GDP was TL 251.8 billion, representing a 6 percent increase over the same quarter the preceding year. The national income per capita was TL 13,269 ($8,590) for 2009. The calendar-adjusted GDP growth in the final quarter of 2009 was 4 percent over the same three months of 2008, while the seasonal and calendar-adjusted GDP growth was realized as 2.3 percent in the same period.
Evaluating the growth figures, Economy Minister Ali Babacan, speaking in Ankara on Wednesday, said the results were “more positive than expectations.”
“Based on Wednesday's figures, we can argue that 2009 was far better than expected for Turkey, despite the negative impacts of the crisis,” he said. The minister emphasized that the government expects the encouraging trend to continue in 2010. “We have faith Turkey will grow more than 3.5 percent in 2010 as stipulated in our medium-term program,” he said, adding that the country's economy has emerged from the crisis thanks to strong austerity measures applied in the market.
In separate comments on the issue, Industry and Trade Minister Nihat Ergün agreed with Babacan, as he also stressed that the growth figures “were above expectations.” Speaking to the Habertürk TV station, Ergun said the Turkish economy had begun recovering from the crisis as early as March 2009. The minister reiterated the government's expectations for sustainable growth in the economy in the long run.
Main opposition Republican People's Party (CHP) leader Deniz Baykal, speaking to his party's parliamentary group on Wednesday, said the government should intensify its quest to bring a solution for skyrocketing unemployment if it wants to maintain sustainable growth in the economy.
According to Boğaziçi University's İbrahim Öztürk, no one expected to see 6 percent growth in the final quarter of 2009, calling it a clear indicator that the economy has started to pick up. Many spoke of a contraction of around 7 or even 8 percent for 2009. The government, too, expected greater contraction.
However, a 4.7 percent drop in 2009 -- understandable during a crisis -- once again proved that Turkey's potential and lessons learned from past crises were underestimated by a large portion of the country. Öztürk stressed that both banks and industrialists might have exaggerated the problems facing the economy last year. “Declarations by some parties which were full of anxiety about a heavy hit to the Turkish economy were also effective in fueling pessimism in the market.”
He suggested that sectors such as construction, tourism, industrial manufacturing, mining and agriculture, which contribute to employment in the first place, should be encouraged in the coming months. Öztürk said contraction in an economy during a crisis is normal. It would have yielded negative results for the economy in the long run had the government tried to minimize the contraction with some “artificial measures,” he said.
Double-digit growth very likely in Q1
Turkish Confederation of Businessmen and Industrialists (TUSKON) Chairman Rızanur Meral told Today's Zaman that TUSKON believes Turkey will maintain the growth that started in the final quarter of 2009 and that most indices signal even better performance in the months to come.
“We could see double-digit growth in the first quarter of this year. There is an increase both in domestic and foreign demand,” he said, adding that TUSKON expects 5 percent growth in the economy this year. “We believe that such a figure is realistic; foreign observers agree,” he stated.
Speaking to Today's Zaman in a phone interview, Turkish Exporters Assembly (TİM) President Mehmet Büyükekşi said the export figures in the final quarter of 2009 were the initial sign of such growth and that they expect even more growth in the economy in the next three months. “A steady increase in exports, the backbone of the economy, will drive growth figures higher in the months to come,” he asserted.
Independent Industrialists and Businessmen's Association (MÜSİAD) President Ömer Cihad Vardan joined those who suggested that there would be double-digit growth in economy in the first quarter of 2010. Recalling that Turkey suffered a 14.5 percent contraction in the first quarter of 2009, a historic high, Vardan underlined that a growth of 6 percent in final three months of 2009 proved that the Treasury performed successfully during the crisis.
Evaluating the figures in İstanbul on Wednesday, Murat Yalçıntaş, the president of the İstanbul Chamber of Commerce (İTO), cited a “dynamic private sector” as one of the driving forces behind the growth in the economy in the final quarter of last year. “The Turkish Statistics Institute [TurkStat] figures clearly indicate that Turkey has left the worst of the crisis behind it to begin a growth trend starting in the last three months of 2009.” Regarding expectations for double-digit growth in 2010, Yalçıntaş said the İTO agreed that such an expectation is realistic.
On the side of the finance sector, expectations for 2010 are high, too. Ersin Özince, the general manager of Turkey's largest private bank, İş Bankası, said in parallel with the growth in the economy, the Turkish banking sector will also maintain a sustainable recovery this year.
2001, 2009 crises have similarities in Turkey
Observers argued that the Turkish economy performed similarly during the 2001 and 2009 crises. Following a drastic 9.5 percent contraction during the 2001 crisis, the Turkish economy grew 7.9 percent in 2002, an undisputable rise from the ashes. A similar occurrence is now expected this year.
The impressive comeback in 2002 was followed by growth of 5.9 percent, 9.9 percent, 7.6 percent, 6 percent and 4.7 percent in the years 2003, 2004, 2005, 2006 and 2007, respectively. Despite 7 percent contraction in the final quarter of 2008, Turkey ended the year with 0.7 percent growth.
