Last week, I was quite busy giving a series of conferences, Tuesday in Muğla, Wednesday in Adana, Thursday in İzmir, and Friday in Mersin. And on the weekend, I attended a workshop in Kartepe regarding the future of US-Turkey relations, giving me the opportunity to get in touch with business people as well as opinion leaders.
I have to admit that the Exports data released on Thursday helped significantly boost our morale. Regarding the imports data, on the other hand, I think we should expect another sharp fall. We should however not forget that energy imports will definitely increase as winter approaches. Therefore, imports are expected to rise while economic growth is slowing down. After all, as we all know that natural gas generates 40-45% of Turkey’s electricity, we have no other choice but to reduce imports by carrying out high value added export activities.
Last week, the European Bank for Reconstruction and Development (EBRD) has revised downwards forecast about Turkey’s growth, from 4.4% to 3.6% in 2018 and from %4.2 to1% in 2019.
“Exports will help ease our pain…”
According to EBRD forecast, overheated Turkish economy has entered a sharp slowdown in the second half of 2018, while the short term external financing requirement remains high, in excess of 25% of GDP.
Interestingly, EBRD also suggests net exports will continue to make an increasing contribution to growth. Although EBRD made some pretty negative estimates regarding certain economic parameters, it’s pleasing to see that the contribution of exports was not overlooked. However, I must mention that contribution of exports will continue to increase significantly due to slowdown in consumption and investments.
In short, export activities will help Turkish economy survive the upcoming periods, which should further push the Government to support exports in every way possible, encourage exporting activities and implement changes regarding the financing of exports.