The industrial data released last week turned out to be quite promising indeed. Despite the rise in November production data, the sharp decline in consumer durables production did not go unnoticed. This time, this significant rise in production December data got my hope up. Obviously, as many Turkish sectors are dependent on imported raw materials, this recent improvement in industry also reflects on export growth.
As you may remember, I had objected to those who were predicting a 2.5% slowdown in GDP growth, consistently saying that Turkish economic growth could hit around 0% at the worst. As months passed by, I kept my hopes high despite the struggles in Turkish economy was going through. Turkey’s GDP growth was projected at 0.3% according to delayed October revisions from the IMF and the World Bank, but I knew that Turkish economy would grow at a minimum rate between 0.4% and 0.7%.
I am revising my expectations for industrial production and 2019 GDP growth, which showed a way better performance than 2018 throughout December and the whole year, to a bandwidth of 0.6% and 1.0%. So, what does all this show us?
“Foreigners fail making accurate forecasts…”
The previous period showed us that the expectations of International Institutions do not match the reality neither at a global nor a regional scale. But, it is a fact that foreign investors do pay attention to what these institutions have to say. On the other hand, it is not uncommon the decisions made by rating agencies are often shaped around political developments. Everyone listens to these institutions one way or another and spends significant amount of money to buy their services.
Obviously, it’s not easy to work under these circumstances. I did my best to voice my expectations at every national and international meeting I attended during last year. I at least think I was able to convince the CEOs of Turkey-based international companies.
As a result, all my projections turned out to be accurate: I have spot-on predictions and almost spot-on predictions as I acted rather cautiously with some of them. But the reason lying behind the fact that I was able to make spot-on forecasts does nothing to do with me being an economist. It’s because I was able to talk to sector reps in numerous meeting and hear their honest opinions about the state of Turkish economy. I was really surprised to see that the data I collected from first-hand sources was hardly compatible with the data provided in international institutions’ reports.
I was heavily criticised when I spoke the truth while trying to cause the least offense possible. Nevertheless, it’s indeed a great success that we have hopes for 1% GDP growth in a tough year like 2019.
As an economist, I would like to extend my sincere thanks to all institutions that spared no effort in ensuring Turkey hold its head high. Now, let’s make every effort not to embarrass ourselves in 2020.