Have we grown, or shrunk?
According to the data announced by TUIK, the Turkish economy grew by 3.9 percent in the first quarter of 2023. The recently announced second quarter growth was 3.8 percent. Growth rates are about the same. Behind these growths that make everyone happy, there are much higher growth rates in the services and construction sectors.
So, how is the growth of the real sector, the industrial sector, which is the main actor and basis of the economy? It’s not pleasing at all. While the industry shrank by 7 per thousand in the first quarter of 2023, it shrank by a significant 2.6 percent in the second quarter. There is a successive and increasing contraction in the real sector.
High interest rates, highly increasing exchange rates, difficulty in accessing finance, uncertainties in economic policies, election period difficulties, major earthquake devastation, and stagnation in the world economy caused the first six months of this year to be difficult, as expected. The global recession is expected to continue for several more years.While these conditions were continuing, the Medium Term Program (MTP) was announced by President Recep Tayyip Erdoğan and Vice President Cevdet Yılmaz. More than 10 MTPs have been announced so far. Each MTP had to be updated after a short time because the targets were deviated from. Cevdet Yılmaz also specifically emphasized that there may be updates during his presentation.
Still, MTPs show all actors of the economy the road map to be followed in the coming period. It reveals the perspective, possibilities and opportunities of economic management. It enables several years of analysis.
Vice President Cevdet Yılmaz announced that the dollar/TL price is expected to be 36.8 TL on average in 2024. This statement means a significant increase compared to the previously estimated and announced dollar/TL prices.
Yılmaz stated that inflation is targeted at 65 percent in 2023. Again, two weeks ago, the Central Bank announced that this target was 58 percent.
So, as you can see, updates are made as quickly as possible. We actually consider these statements as positive. The biggest problems of the previous periods were that the targets set were far from reality and it was not known to what extent they were accepted by the government. This was reducing faith in the MTP due to constantly, substantially different data and policies.
While the last MTP was being announced, President Recep Tayyip Erdoğan said an important word. “We stand behind this MTP,” he emphasized.
It is very important that a country’s economic policies follow a certain line and do not zigzag or decline. Determined progress towards the set goals is also a priority for the real sector. Once the fog has been cleared so that we can see the future clearly, we will achieve this with our high level of experience, as we have done so far.
While I wish my industrialist friends a happy, peaceful and fruitful production period, I wish everyone a happy 100th Anniversary of the Republic of Turkey.
COIZ Chairman of the Board