This, I told you about both on television and on my YouTube account. Today, you will read it on my website and listen to it in my own voice on Spotify.
I’ve been getting this question a lot lately: “How will Turkish economy gather strength after the coronavirus pandemic?”
In order to come up with a satisfying answer to that, we should first identify the sectors that contribute to Turkey’s GDP growth. Turkish economy is centred on construction, government expenditures and services, and in this economic model, the industry’s contribution to GDP doesn’t exceed 23 percent.
So, based on this perspective, let’s take a look at the sectors which are expected to improve more slowly compared to others: The sad but true fact is that transportation, airline, construction materials, automotive and car rental, electronics, education, furniture, real estate, jewellery, and hospitality industries will slowly gather momentum, which is expected to happen not before the 4th quarter of the year.
Although tourism industry is important in terms of helping increase foreign currency-denominated revenue and employment rate, its contribution to Turkey’s GDP remains limited. So, Turkish economy would not be drastically affected by a decline in tourism. But the automotive sector holds a critical importance among all industrial sectors. A contraction in furniture sector for instance is obviously bad but it won’t necessarily cause Turkish GDP to decline further. However, motor vehicle production, industrial production and economic growth go hand in hand in Turkey. The fact that the automotive industry is not expected to attain a momentum of rapid growth indicates that Turkey will not be able to see a V-shaped recovery anytime soon.
Although I am not very fond of these two, we all know that construction and housing sectors contribute hugely to GDP, just like the automotive industry. If real estate and automotive industries could achieve a rapid momentum, I would feel more hopeful about Turkish economy achieving a V-shaped recovery. Sadly, this is not case here.
“Sectors with most promising futures…”
Now, let’s take a quick look at sectors that seem capable of quick improvement: healthcare, banking and public sector, internet-TV, distance education, clothing, personal care, wellness & cosmetics, food and beverage sectors.
Considering the fact that service sector greatly contributes to Turkey’s economic growth, we thus come to the following conclusion: Turkish economy will definitely gather its strength back in the first quarter of 2021. As I have mentioned yesterday, I expect Turkey’s GDP to grow by -0.5% and +0.5% in 2020, and in my estimate, it will spike above 5% in 2021 while achieving 3,5-4.5% in 2022.
As for the other countries: Unfortunately, Italy is likely to see an L-shaped recovery, which means the country will suffer substantial losses followed by a period of stagnation. The United States, on the other hand, has its own unique economic structure. After all, this is the country accounting for 33% of the global consumption, 17% of global imports and for nearly a quarter of the world’s GDP. When we take a look at the U.S.’ efforts to come out of previous recessions, we can see that it took longer time for the country to show signs of improvement after 1998.
Nevertheless, I expect that the United States will quickly recover from recession, especially considering that it has the Federal Reserve, which acts like the Central Bank of the World. As I said yesterday, I’m not as pessimistic as the IMF.
