Economic Growth in 2013 Will Be Primarily Driven by Domestic Demand.
Expected developments in the Turkish economy in 2013 were discussed at the "2013 Macroeconomic Expectations Panel." The panel featured speakers Dr. Murat Üçer, Assoc. Prof. Refet Gürkaynak, and Dr. Tevfik Aksoy. Potential risks were addressed during the discussions. It was stated that 2012 was more positive than expected, production was close to potential, and if a consistent fiscal policy is implemented, inflation will be brought under control without hindering growth, and economic growth in 2013 is expected to be primarily driven by domestic demand. Furthermore, the risks facing the Turkish economy were examined.
A Slowdown in Growth Rate is Expected.
Aksoy, likening 2013 to a twilight zone for global growth, said, "We are at the intermediate point between dawn and darkness." He predicted a recovery after hitting rock bottom with a pessimistic outlook until the second quarter. He stated that the US would not fully overcome the fiscal cliff and that a slowdown in growth rate is expected. He also expressed concern about the Turkish economy's excessive dependence on foreign countries, noting that 2013 will be a critical year in terms of fiscal policy. Dr. Murat Üçer, on the other hand, noted that the economy had a very pessimistic outlook at the end of 2011, but with an interesting divergence, the market behavior was quite different, even though the macro story did not change as much as he expected. He reported that the contraction in imports also played a significant role behind the narrowing of the current account deficit. He stated that imports collapsed with the collapse of investment and that Turkey needs to overcome this dynamic, concluding, "The growth outlook is uncertain, interest rates are negative, household borrowing is increasing rapidly, there is an open position risk for companies, and there are also factors like political uncertainty. If these factors are resolved, the growth outlook will improve."
According to Assoc. Prof. Refet Gürkaynak, the Economy Will Grow by 4.5%.
Assoc. Prof. Refet Gürkaynak stated that growth will be the primary policy tool for the government in 2013 and that the economy will grow in the range of 4-4.5%. He noted that the high unemployment rate is strangely not seen as a problem in Turkey and that in a country with 11 million housewives, production is what it is, no matter what is done. He stated that there is no room for unemployment to fall further and that women's participation in the labor force needs to increase. Finally, he said that risks are accumulating, but there is no data on where they will erupt from, adding, "We need to be concerned; we boast when things go too well. But we see that countries that don't boast are more successful."
