News / Economy

Turkey Starting to Feel Effects of Global Economic Turmoil

Turkish Deputy Prime Minister and Finance Minister Ali Babacan (file photo)
Turkish Deputy Prime Minister and Finance Minister Ali Babacan (file photo)

The world economic crisis appears to be hitting Turkey, one of the fastest growing economies in the world.  The government is lowering its growth predictions and says it is now importing more goods and services than it is exporting.

The Turkish Deputy Prime Minister and Finance Minister Ali Babacan said Thursday that the country's economy is likely to slow down next year.

The deputy prime minister warned that the government had revised down its predictions for economic growth to four percent in 2012 from five percent, after hitting an estimated 7.5 percent this year.

Up until now, the Turkish economy seemed to be immune to the bad news, maintaining a fast-clip level of growth the past few years.  

Chief Economist Inan Demir of Turkey's Finance Bank says the growth prediction for 2012 may still be too optimistic.

"The growth estimate for four percent for next year on top of 7.5 percent for 2011 is ambitious to say the least, given the uncertainties surrounding the global economy. So that could be a point of the concern for the market going forward," said Demir.

Emre Yigit, chief economist for the Turkish trading house Global Securities, says the current financial crisis in Europe is of particular concern to Turkey.

"Europe is our main trading partner," he said. "It takes roughly half of our exports and provides with roughly half of our imports. So it's exposed on the trade channel if growth in Europe slows down.  If the European recession deepens, then the Turkish exporters will face difficulties."

A large amount of goods being imported into a country versus being exported can often be a sign of an unbalanced economy.  To correct the imbalance, countries borrow money from other nations at low interest rates. But, the longer the deficit goes on, the higher the level of investment debits will be accrued, taking a toll on a nation's economy in the long term.

Finance Bank economist Inan Demir warns this could make Turkey vulnerable to shocks like the 2008 collapse in the U.S.-based Lehman Brothers bank.

"Such a scenario at the extreme could see Turkey's GDP growth turning negative in 2012. Although its not our base line scenario I think it worth highlighting," he said.

But efforts by Turkish businesses to diversify their dependance on European markets could help resolve its vulnerability to such financial ripples. And, the fact that the Turkish Lira has decreased in value, making its exports cheaper and more desirable in the global markets, could help offset future problems.

"Over 2012, I expect more Turkish exports to Japan to the United States, to the developing world and less to Europe," said Yigit of Global Securities. Let's not to forget the Turkish lira has already lost 20 percent to 25 percent of its value, over the course of next year. So Turkish exporters are much more competitive abroad than they were so this should take care of the export problems."

Despite the outcome, this current imbalance in Turkey shows that even the fastest growing economies are not impervious to the global economic downturn.

You May Like

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. More

Video Sudan School Becomes Target of Aerial Attacks

Dropout rate at an all-time high in South Kordofan state because many schools have been destroyed during 3-year civil war More

Tennessee Songbirds Fly Coop Long Before Tornadoes Arrive

Researchers say birds apparently alerted to danger by sounds at frequencies below range of human hearing 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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8140
JPY
USD
118.81
GBP
USD
0.6402
CAD
USD
1.1597
INR
USD
63.066

Rates may not be current.