About GDP growth rates and expectations

As the number of those who keep telling me to ‘write shorter articles since they don’t have enough time to read them every day’ is increasing, I’m going to try to be as brief and as clear as I possibly can.

It appears to me that people don’t have time even to live their lives. If they could stop what they’re doing to take a look around them, they would see what is going on in the world. I was boarding a plane the other day and I heard two men arguing about business as loudly as they could! We had to put up with their senseless conversation about a low value-added and extremely uninteresting product. It’s not only them; self-proclaimed intellectuals too love to talk loudly about superficial stuff, shouting each other from one seat to another. I wish they knew the fact that there is always more to learn, more to see. If only we knew this, these clamorous voices we bequeath to our children will no longer exist. We will finally enjoy the virtue of silence.

I reviewed GDP growth data for the third quarter of the year during my guest appearance on television yesterday. Turkish GDP seems to have grown 0.9 percent in July-September period. Not a surprising figure for me, to be honest. But, some people expected a GDP growth above 1 percent for some reason. I really don’t know why they had such high expectation. For a more accurate and spot-on forecast, you should visit farmers’ markets, talk to the vendors and customers there.

GDP growth numbers turned out to be better thanks to the basis effect this year. If this upward trend continues, Turkey might achieve an annual GDP growth rate around 0%. I personally expect a stronger growth in the fourth quarter. If everything goes as we anticipate, Turkey might finish 2019 with a GDP growth of 0% to 0.5%. Actually, I would be surprised to see an annual growth higher than 0.5% but I hope I can.

“The mistake of international institutions…”

For the first 10 months of 2019, OECD, World Bank and the IMF said that they expected 2.5% shrinkage in Turkish economy. But, I have consistently objected to such projections because I travel around Turkey all the time and as a result of all those ‘shared wisdom’ meetings I attended all around Turkey, of all those impressions I had in these meetings, I came to the conclusion that Turkish economy would finish 2019 not with 2.5% shrinkage, but 0% or a slightly positive growth.

IMF, World Bank and the IMF have revised upwards its GDP forecast for Turkish economy in October 2019. But, it was too little too late. Because of this delay, the world’s perception of was damaged again. Actually, Turkey has fallen victim to the outlook reports release calendar of these institutions.

A word of warning based on the details of this GDP growth data: Construction activities in Turkey seem to have considerably slowed down in the third quarter. As I have always said, construction business will not get Turkey anywhere therefor Turkey must focus on improving its industry, production activities as well as all other sectors that can generate value added. The current data shows construction industry-based economic growth will run Turkey into more troubles.