News / Europe

Turkey Shows Robust Growth, But Warning Signs Are Ahead

Istanbul store front (file photo)
Istanbul store front (file photo)
Dorian Jones

While most of Europe struggles to secure economic growth, the Turkish economy has been booming. The country's economy has recovered rapidly from the ongoing economic crisis, posting 10.3 percent growth in the second quarter, tying China for the fastest growth in the G-20. But, analysts warn, dark clouds could be on the horizon.

At one of the many factories of Aydinlar Construction, business is booming. The company not only builds large construction projects, it also produces construction materials and is a supplier of such things as turbines and pumps.

One of the executives Omer Aydinlar says its success comes from Turkey's deepening ties with its Middle Eastern neighbors.

"[The] Middle East is very important for us. There is a big change actually, more and Middle Easterners especially from the UAE, are coming to Turkey. And with the changing laws and environment in Turkey there is a lot of investment coming to Turkey and there is a lot of partnerships being established with the Middle Easterners. And of course once they come to Turkey and establish those partnerships and [do] business with Turkey, they pull those Turkish investors and businessmen back to their country, back to the region as well."

Analysts say the Turkish government's fostering ties with its Middle Eastern neighbors is a part of wider initiative to diversify Turkey's dependence on the European markets. But it’s not only the Mideast that Turkey has its eyes on.

A special trade promotion video has been produced by the Turkish business confederation Musiad, aimed at African markets. Omer Bollat, former head of Musiad, says Turkey has managed to successfully weather the world economic turmoil partially by diversifying its target markets in business.

"Turkey has also been opening up to Eurasia markets, the Middle Eastern Gulf countries and African countries --  particularly North African countries."  

That policy is paying dividends resulting in record exports.

The robust nature of Turkey's recovery also lies in the strength of its financial sector, says chief economist Emre Yigit of the Turkish trading house Global Securities.  

"We learned our lessons from the crisis in 2001 to 2002, when we underwent our own little banking collapse, which cost us something like 30 to 35 percent of [our] GDP, by the time we cleaned up all the mess."

The country's banking sector after the introduction of IMF policies following its banking crisis, is among the best regulated and controlled banks in the world. The levels of private debt too are among the lowest in the G20 and the government this year has cut its budget deficit.

Yigit says now , things are about as good as they can get, but warns of storm clouds on the horizon.

"The fact that we are outgrowing our European trading partners by a factor of between five to 10 times this year means our current account has plunged to a deficit and is likely to widen further next year -- at which point we will be running the third or fourth current deficit in the world. I am not sure that is sustainable even in the medium term."

Analysts agree that while its recovery has been impressive, Turkey's dependence on imports and domestic demand is magnifying a potentially fatal flaw: a blossoming deficit financed by speculative investments. That could mean the end of the Turkish economic party followed by a severe hangover.

NEW: Follow our Middle East stories on Twitter
and discuss them on our Facebook page.

You May Like

Video Protests Continue in Ferguson, Spread to Other US Cities

Missouri officials say deployment of more than 2,000 National Guard soldiers helps curb second night of rampant arson and looting in Midwestern town More

Video Ebola, Crackdown on Illegals Hit Business in Guangzhou

Chinese city has largest community of Africans in Asia More

Video Legendary Lebanese Actress, Singer Sabah Dies at 87

Music and film diva, affectionately called 'Sabbouha' by millions of her fans, performed at Carnegie Hall in New York, Royal Albert Hall in London, Olympia in Paris, Sydney Opera House in Sydney More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Changei
X
November 24, 2014 10:09 PM
Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid