REGIONAL REPORT
According to the World Bank , Turkey ’ s economy grew 11 per cent in 2021 , the fastest among the G20 countries
Government deployed tax rate reductions and fuel subsidies to dampen the impact of inflation ,” said the World Bank .
“ The Russian invasion of Ukraine is also amplifying the headwinds facing the Turkish economy . Given Turkey ’ s close economic ties to both Russia and Ukraine , the war is expected to disrupt Turkey ’ s energy and agricultural trade , tourist arrivals and overseas construction activities . Price spikes of essential commodity imports will directly affect households and industry and adversely impact the current account balance and inflation . Lowincome households in Turkey are especially affected as they spend nearly twice as much of their budget as the wealthiest on food and housing ,” it added .
The World Bank believes that although Turkey ’ s interest rate cuts from September 2021 supported demand , they also amplified macro-financial instability which , combined with spill-overs from the Ukraine-Russia war , will lower 2022 growth to 1.4 per cent . Despite rising domestic inflation and tightening global monetary conditions , Turkey ’ s Central Bank lowered interest rates five times by a total of 500 basis points between September 2021 and year-end . The move rapidly worsened macrofinancial conditions and dented investor confidence , it said .
“ Rising energy and food price inflation will hurt the poor the most , compromising a gradual employment-driven , post-pandemic poverty
Above : Main product groups in machinery export of Turkey ( 2019 , Million $). Left : Main countries for Turkish machinery exports ( 2019 ). Source : TurkStat-Turkish Statistical Institute .
recovery ,” it explained . “ On the positive side , thanks to strong export growth , the current account deficit narrowed to 1.8 per cent of GDP in 2021 from five per cent in 2020 . However , gross foreign exchange reserves declined to US $ 111- billion in 2021 amid foreign exchange interventions .”
Turkey enjoyed high growth rates between 2002 and 2017 that propelled the country to the higher reaches of upper-middle-income status . But productivity growth slowed as reform momentum waned , and efforts turned to supporting growth with credit booms and a demand stimulus , exacerbating internal and external vulnerabilities . High private sector debt , persistent current account deficits financed by short-term portfolio flows , high inflation and high unemployment have been intensified by macro-financial instability since August 2018 .
“ The economy ’ s high energy and carbon intensity make it vulnerable to global energy supply and price volatility and pose a challenge for Turkey ’ s exporters in the context of global and regional decarbonisation policies ,” explained the World Bank .
TURKISH MACHINERY INDUSTRY
TURKISH MACHINERY SECTOR HAS MORE THAN QUADRUPLED ITS REVENUES TO USD 21 BILLION AND DOUBLED ITS WORKFORCE TO 244K OVER THE PAST DECADE
AN UNPRECEDENTED AVERAGE GROWTH OF 25 % IN 5 YEARS |
TURKEY SHOOK OFF GLOBAL CRISIS WHILE DOUBLING ITS REVENUE & REACHING
VALUE-ADD RATIO OF 25 %
|
DECREASE IN REVENUE MAINLY
CAUSED BY THE 40 % INCREASE IN
CURRENCY
|
244K |
23 billion $ |
19,726 |
20,044 |
21,849 |
23,828 |
|
|
|
|
21,794 21,654 |
23,306 |
22,789 |
20,760 |
102K 15,636
16,284
13,716 12,450
9,312
10,442
5 billion $ 7,312
5,025
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue ( M $)
Source : Turkish Statistical Institute Industry & Services Statistics NACE Rev2 Division 28 , Central Bank of Republic of Turkey
Employment Turkish machinery industry statistics up to 2019 .
www . ismr . net | ISMR July / August 2022 | 39