The fact that Turkey’s economic growth hits record high has helped us forget about existing international tensions. A rate of 11,1% announced yesterday caused great excitement particularly in Ankara. On the other hand, there were many criticisms claiming that growth data does not reflect the truth.
I would like to put together an impartial analysis while keeping distance from those who say, “Turkey, once again, demonstrated its power” and those claiming, “These figures are not right!”
First of all, it’s normal for Turkey to release high growth rate considering its negative growth during the same period last year. On the other hand, let’s not forget about the fact that Turkish economic growth was gaining momentum with the Credit Guarantee Fund launched this year. Besides, there was a rapid increase in GDP growth, in terms of contracting/construction business and service sector; also, final consumption expenditure has lately become one of the real driving forces of Turkish economy. In short, we can’t deny the fact that Turkish Economy has really grew over the course of 2017.
But, I would like say a few words to those are genuinely proud with the economic power of Turkey: Growing through high technology, innovation, R&D, design and branding would be much more befitting of a country like Turkey. So, to avoid harsh fluctuations in the future, we should find new means to replace “price/quality” competition when creating added value. In this sense, trying to grow through a strong export performance may be a good starting point as the exporters have large knowledge of global competition in business.
The fact that the inflation does not stop increasing despite high growth rates refutes the thesis of “Inflation will go down when we will produce goods and services”, and also the “Raising interest rates tend to reduce the rate of economic growth”. In the meantime, people are naturally quite concerned about the double-digit unemployment rates.
Although “Turkish Economic Growth” data does indeed reflect the truth, it seems like Turkey will have to keep struggling with unemployment, inflation and high interest rates because of its inadequate growth model.