Page 9 - TURKRptFeb20

Comfort zones . Analysts and journalists covering the economy generally do not like straying from their comfort zones, thus they continue to process the official data, even when it seems warped. And Erdogan and son-in-law finance minister Berat Albayrak make their work even easier by essentially releasing headline data earlier than the official publication dates with so-called forecasts that are uncannily accurate, at least as regards the official picture.
It is pretty much certain that the 2019 official growth rate will be posted as slightly above zero . The unveiling of an official growth achievement of 4-5% for Q4 2019 seems to be ahead.
Turkey has grown 5% in Q4 and 0.5% in 2019 as a whole, Finance Minister Albayrak said on January 9.
And, if the Erdogan show remains in place, expect 5% in 2020 in line with the president’s aspirations, despite analysts currently suggesting around 3% looks more realistic.
If Erdogan is overthrown in early elections, all bets are off .
The official data suggests Turkey had a $789bn economy in 2018, although due to some controversies in the exchange rate approach taken by the TUIK, there is a clash with the $771bn forecast by the IMF.
For 2019 and 2020, the IMF and the government are in agreement, with $740bn pencilled in for 2019 and $812bn-813bn for 2020.
Even the official figures suggest that investment has fallen sharply, hurting hopes for sustainable growth. The construction industry remains in serious trouble with unpayable debts from the easy money era in which it drove the economy.
Erdogan has not headed to the IMF but he has chosen to scrap fundaments of the free market to control the exchange rate, interest rates, and food prices among other things, while the TUIK’s statistical acrobatics serve his cause.
Looking at Erdogan’s opening of the credit taps, there is actually no financial source to support the latest cycle of loan stimuli but the central bank is on the case, using easing via a complicated monetary policy that makes it hard to follow how much lira it is pumping into the economy.
Yet such is the wretchedness out there that private lenders are still dragging their feet over extending new loans and domestic confidence in the government remains pretty much at rock bottom. Frothy state banks, meanwhile, risk exceeding the 20% loan growth threshold set by the central bank to trigger more favourable reserve requirements.
Crazy or crazy wow? Of late, Erdogan has been reviving big pronouncements on the glories that will be achieved by him with his mega Istanbul Canal project, which is emerging as a clash-point between Erdogan and Istanbul mayor Imamoglu.
Despite all the data manipulations, the official number of unemployed people in Turkey broke consecutive records . Some 4.4mn people were officially unemployed as of October. In addition to the 4.4mn, there were 2.18mn people ready to work but who were listed as not having actively sought a job in the previous few weeks. A total of 668,000 of them said they had lost any hope of finding employment. There was officially 1.15mn such jobless people who had remained unemployed for longer than one-year as of October. Suicides attributed to economic despair are not at all uncommon.
9 TURKEY Country Report OUTLOOK 2020 www.intellinews.com