Turkey’s economy looks to have proved resistant to a slowdown that blighted most of western Europe in the second quarter, helped by a move by firms to refocus on Africa and the Middle East that generated double-digit growth in exports.
A Reuters poll of commercial bank economists on Friday predicted official numbers on Monday would show growth inched up to 3.25 per cent year-on-year from 3.2 per cent in the first quarter.
That shows the success so far of policymakers, largely the country’s central bank, in steering the economy softly back down to earth after a boom that saw it expand at an annual rate of more than 10 per cent at the start of 2011.
Helped by relatively low debt and its 80 million domestic consumers, its prospects are far brighter than most of its European counterparts.
“In euro zone countries, governments have implemented strict fiscal measures. Their financial system is deleveraging and households need to improve their balance sheets,” said Emre Tekmen, economist at bank TEB in Istanbul. “Turkey doesn’t have any of these problems. On the export front, the market diversification of Turkish exporters also is a positive factor for Turkey.”
Stellar economic growth over the last decade has been the bedrock of the success of Turkey’s ruling Justice and Development Party (AKP), which has overseen a near tripling of per capita income since coming to power in late 2002.
But, hampered by the rise in the cost of the fuel it has to import, the economy is also still burdened by relatively high interest rates and heavily reliant on income from the cheap goods it sells abroad.
Exports rose 12.6 per cent to $87.2 billion in the first seven months of the year despite a deepening crisis in Europe, which is Turkey’s main trading partner.
Over the same period the share of exports that go to European Union countries fell to 39 per cent from 48 per cent in 2011, while the share in countries of Africa and the Near and Middle East rose to 37 per cent from 27 per cent.
“If there wasn’t any market diversification, Turkish exports would be at least 10 per cent lower than their current level. This has increased the impact of exports on growth,” said Adnan Dalgakiran, board member of the Turkish Exporters Assembly.