Friday, 9 October 2009The Directorate-General for Economic and Financial Affairs has recently published a report which analyzes the economic condition of Turkey, Croatia, Macedonia, Albania, Bosnia and Herzegovina, Serbia, Montenegro, and Kosovo in the 3rd quarter of 2009.
According to the report, Turkey will shrink by 3.7 percent this year, but will grow around 2.2 percent next year. It is also expected that although the unemployment rate will be 13.1 percent for this year, the following year the number will decrease to 12.9 per cent. The balance of payments deficit will be 1.8 percent of the GDP; however, the deficit could increase to 2.8 percent of the GDP in the following year.
The report also stated that the investment rate in 2009 is very low in Turkey. For example, the investment rate decreased by nearly 30 percent in the second quarter of 2009 in the Turkish private sector when compared to the previous year. The labor market has also been affected by this negative table, and the unemployment rate was estimated at 13.6 percent which is much higher than the previous years which was recorded around 9.2 percent.
In terms of the balance of trade, the report points out that the trade balance deficit has begun to decrease after September 2008. In both July and August, the import rate decreased to 35-40 percent; however, the export in goods and services also decreased around 30 per cent in the country.
The report also mentions that the annual inflation rate could increase at a limited amount due to the expiration of the contemporary deduction for the consumption tax.
In spite of the increase in tax revenues, according to the report, the budget deficit will exceed 8 percent of the GDP at the end of the year. The increasing amount of credit to the municipalities is shown as the main reason for this deficit in the report.
Another interesting point in the report is that the countries affected most by the current financial crises in the Balkan region are Turkey and Croatia, and it is expected that the crisis will continue to affect the region in the following period.
Yilmaz KAPLAN (JTW)
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Friday, 9 October 2009
Journal of Turkish Weekly
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