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

As US Strikes Syria, China Sees Parallels at Home

Beijing is debating how much support to give international coalition against IS militants and trying to figure out how many Chinese nationals may have joined group overseas More

CDC: Ebola Could Infect 1.4 M by 2015

US health officials say if efforts to curb the outbreak are not increased, cases will soar dramatically by early next year More

Video USAID Provides $231 Million for Girls Education in 5 Countries

US Agency for International Development partners with celebrities to call attention to importance of education for girls worldwide 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.
Washington to Pyongyang: 'Shut This Evil System Down'i
X
Scott Stearns
September 23, 2014 10:52 PM
U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video US, Gulf Allies Strike Islamic State Militants in Syria

United States forces have carried out strikes against Islamic State or ISIL militant positions in Syria - the first time Western forces have taken action on Syrian soil. Five U.S. allies from the Gulf joined the military action. Local reports suggest dozens of militants were killed. The U.S. also carried out unilateral missile strikes against a Syria-based terror group which Washington says poses an imminent threat to the West. Henry Ridgwell reports from London.
Video

Video High Intensity Focused Ultrasound Used to Kill Cancer Tumor

There is a new way of killing certain cancer tumors that allows the patient to go home on the same day. Surgeons at the Keck Medical Center of the University of Southern California became the first doctors to use this procedure on a patient with the help of high intensity focused ultrasound, or HIFU, and new robotic technology. Elizabeth Lee reports from Los Angeles.
Video

Video USAID Provides $231 Million for Girls Education in Five Countries

Hollywood stars Alicia Keys, Jennifer Garner and 30 others have voiced their support for a U.S.-backed initiative called "Let Girls Learn." The $231 million program, funded by the U.S. Agency for International Development, is aimed at ensuring public and quality education for girls worldwide. As VOA's Mariama Diallo reports, this new program will focus on five countries in Africa, South Asia, Latin America and the Middle East.
Video

Video UN: Relocation of Bedouins in Israel Weakens Two-state Solution

Rural Bedouins living in disputed lands east of Jerusalem could soon find themselves forcibly relocated. VOA's Sharon Behn reports from Jerusalem that while Israel defends the move as in the Bedouins’ best interests, the United Nations says the plan threatens the survival of the two-state solution with Palestinians.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video Prolonged Drought Plagues SW Oklahoma Farmers

Parts of western Texas and southwestern Oklahoma have been in drought conditions for several years running and the deficit in rainfall has taken a heavy toll on cotton and grain production. Oklahoma Governor Mary Fallin says the state has suffered $2 billion in agricultural losses since 2011. There has been rain in recent weeks, but, as VOA’s Greg Flakus reports from Altus, Oklahoma, for most farmers it has been too late.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7756
JPY
USD
108.49
GBP
USD
0.6096
CAD
USD
1.1002
INR
USD
60.951

Rates may not be current.