wiiw Current Analyses and Forecasts
Turkey: Recovering and reconnecting
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Josef Pöschl
in: Will Exports Prevail over Austerity?
wiiw Current Analyses and Forecasts No. 6, July 2010 , pp. 106-109
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In Turkey, the global crisis provoked a fast decline in GDP, 14.5% in the first quarter of 2009.
Thereafter, a swift change in trend followed suit thanks to three factors: a substantial currency depreciation, business-stimulating policies of both the government and the central bank, and the corporate sector's strong 'animal spirits', to use J.M. Keynes' terminology.
The 11.7% GDP increase in the first quarter of 2010 has offset most of the previous decline.
It followed from a massive increase in private investment and consumption expenditures.
Growth may remain substantial, provided Turkish policy makers succeed in avoiding strong real appreciation of the currency.
Thereafter, a swift change in trend followed suit thanks to three factors: a substantial currency depreciation, business-stimulating policies of both the government and the central bank, and the corporate sector's strong 'animal spirits', to use J.M. Keynes' terminology.
The 11.7% GDP increase in the first quarter of 2010 has offset most of the previous decline.
It followed from a massive increase in private investment and consumption expenditures.
Growth may remain substantial, provided Turkish policy makers succeed in avoiding strong real appreciation of the currency.
Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database
Countries covered: SEE, Turkey