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According to Turkstat, the Turkish economy grew in the third quarter of the year. Consumption “fueled” the rate which exceeded expectations. During the normalization period, the effect of cheap lending campaigns conducted by public banks emerged.
Household expenses increased by 9.2% annually when the loan distributed in the third quarter reached 159 billion TL. Data on growth in industry and construction remained below citizen spending.
‘Turkey’s main unemployment’
While Treasury Minister Lütfi Elvan used the phrase “The increase in domestic demand was effective” for the growth figure, economists drew attention to low-interest lending campaigns:
- With cheap and abundant credit pumping, GDP increased in the July-September period.
- It will not continue.
- no matter what the underlying problem is not Turkey’s growth, huge unemployment.
- It is clear where the growth comes from. Growth of bad debt at high cost.
CHEAP CREDIT BREAKING GROWTH
With the cheap money taps running during the epidemic period, economic growth was 6.7% in the third quarter of the year. Growth, which exceeded expectations, was shown to be influenced by the loan. Although employment has also declined in the face of growth with consumption, the same picture should not materialize in the last quarter.
The growth of the Turkish economy carnets has become evident. Turkey Statistical Institute (TSI), according to the data released, Turkey rose above expectations in the third quarter.
Gross domestic product (GDP) for the third quarter of the year (July-September), as a chained volume index, increased by 6.7% in the third quarter of this year compared to the same quarter last year, despite the effects of the new type of coronavirus epidemic (covid-19).
It was estimated that the greatest effect on the above-expected figures was credit. In the face of the economy that has closed with the growing epidemic effect, cheap money taps have been opened. Therefore, the debtor’s consumption was reflected in the figures. There was growth, but only through consumption.
On the other hand, despite the growth, employment has been seen to decline, while the same rates are not considered possible in the last quarter. According to the production method, the estimated GDP at current prices in the third quarter of this year increased by 22.6 percent compared to the same period of the previous year and reached 1 trillion 419 billion 483 million lire.
When the assets that make up GDP are analyzed, in the third quarter of this year, compared to the same period of the previous year, financial and insurance assets as a chained volume index 41.1% information and communication activities 15%, industry 8 %, construction 6.4% agriculture 6.2% other service activities increased by 6%, real estate activities by 2.8%, public administration, education, human health and social services activities by 2.4% and services by 0.8%.
Professional, administrative and support services activities decreased by 4.5%. TURKSTAT also revised the data for the first and second quarters of this year. Economists had predicted that gross domestic product (GDP) would grow by 5% in the third quarter.
Calendar-adjusted GDP, chained volume index, increased by 6.5% in the third quarter of the year compared to the same quarter last year. GDP adjusted for the season and calendar increased by 15.6% in the chain-linked volume index compared to the previous quarter.
CREDIT CREDIT 160 BILLION TL: According to BRSA data, TL loan growth alone was TL 693 billion in January-November of this year. In the period between July-August and September, TL loan growth alone was over TL 159 billion.
‘THE DECREASE IN EMPLOYMENT IN THIS TABLE IS’ IMPOSSIBLE ‘
TUSIAD Chief Economist Mystery Öztok Altinsac is “the first 3 quarters of the year, the Turkish economy grew by 0.4 per cent annually in real terms. (3rd quarter 2020 growth of 6.7%). We will end 2020 with a similar limited surplus growth. As the economy grows, persistent unemployment should not go unnoticed. “
Analyst Hakan Kara said: “It is certain that there will be a serious recovery in the third quarter. We can even call it the fastest recovery from past times of crisis. But during this period, the value of the growth figure decreased. It is more important to monitor employment. So what happened to the occupation? The period of the pandemic is strongly divergent. To read the picture it is useful to focus on employment rather than growth. “Increased disposable income and fair distribution are essential for a healthy recovery.”
Economist Fatih Parlak said: “In an economy where the service sector is not shrinking and investment is growing by 22.5%, it really is a question that needs explanation.
‘THE EFFECT OF EXTERNAL DEMAND IS LESS’
Former central bank governor and party member GOOD Durmuş Yılmaz said: “It doesn’t need to be said much. It’s pretty clear where the growth comes from. Highly expensive bad credit growth. “It’s not going to happen in the fourth quarter,” he said.
Economist Banu Kıvcı Tokalı said: “In the third quarter, the economy grew by 15.6% on a quarterly basis. More than meets the contraction of the 2nd quarter. While we will face a quarterly contraction, we will be able to return to quarterly growth in 2021, with the pandemic effect lagging behind. Domestic demand is the main driver of Q3 growth. Net foreign demand is negative. In addition to consumption expenses, the contribution of investment expenses is substantial and pleasant for the next period.
‘GROWTH HAS INCREASED BUT UNEMPLOYMENT IS STILL NEGATIVE’
Economist Prof. Dr. John Arzova in “Turkey’s GDP in the third quarter increased by 6.7 percent compared to the same quarter last year. However, there is still a negative correlation between GDP and the unemployment rate. The problem” Turkey’s main thing, no matter what the spending is, is not growth, huge unemployment, “he said.
Economist Mustafa Sönmez said: “With abundant and cheap credit, GDP in the July-September period increased by 6.7% compared to the same period in 2018. It was expected. It will not continue. In the last quarter, the economy contracted by about 5 percent and 2020 closed with a contraction of 1 percent “. Economist Uğur Gürses shared the following: “Probably, this is the growth that has cost the country the most; Growth of 6.7% in the third quarter “.
“EXPECTATIONS EXCEEDING 0 PER CENT DURING THE YEAR”
In his assessment of the last quarter of 2020, Tera Investment economist Enver Erkan said that service activities will be negatively impacted when virus-induced restrictions return in the fourth quarter.
Turkey’s restrictions could increase indicating coronavirus-induced effects on the restoration of Erkan’s services, “the central bank identified as one of the 15 percent interest rates due to the high level of inflation. The ongoing process appears to lead to The fight against inflation in terms of both monetary and economic policy comes to the fore. This means that we will not see the impact on growth of the credit growth boom in the last quarter and subsequent quarters. He concluded his words by saying that also if it expects growth close to zero percent for the full year, there may be a slight deviation below or slightly above this.
eleven months of the year, the volume of loans in Turkey reached 693 billion. According to BRSA data, this figure exceeded 159 billion in the third quarter. The abundance of credit has led to an increase in consumer spending by citizens.
MORE INVESTMENT IN MACHINES AND EQUIPMENT
While economists’ comments attract attention, Prof. Dr. Binhan Elif Yılmaz said: “We have grown by consuming, the contribution of credit expansion is exceptional.”
Dr Orhan Karaca stressed that the high growth rate is due to the sharp increase in loans and said: “This growth achieved through the explosion of consumption and investment spending with excessive credit expansion is not sustainable. This was evident at the start of the credit expansion and was also recorded with the boom in exchange rates and the need to raise interest rates again, “he wrote.
Economist Prof. Dr. Erinç Yeldan stressed the contraction in investments in machinery and equipment despite economic growth and stated: “Since the third quarter of 2018, the annual average of the last two years in investments in machinery and equipment is -3.5 %; cumulative contraction – 27.4%. When the contraction in construction is taken into account, the collapse of speculative growth based on credit pumping is clearly visible.
INCREASE THE CONSUMPTION EXPENDITURE OF FAMILIES
Household final consumption expenditure increased by 9.2% in the third quarter of the year, according to the index of concatenated volumes on an annual basis. State final consumption expenditure increased by 1.1% and gross fixed investments by 22.5%. Exports of goods and services decreased by 22.4% in the third quarter of the year compared to the same period last year, while imports increased by 15.8%.
Workforce payments increased 9.7% in the third quarter of the year compared to the same quarter last year, while net operating surplus / mixed income increased 32.1%. The share of labor wages in current prices on gross value added was 32.9% in the third quarter of last year and 29.9% in the third quarter of the year. The share of net operating surplus / mixed income increased from 50.5% to 55.3%.
‘LACK OF DATA APPEARS QUICKLY’
The Mahfi economists commenting on Turkey’s rigid growth data “up to 3-4 years ago, people did not believe the announced inflation rate. Then they stopped believing in the unemployment rate and the growth rate. statement, reactions begin. “Unbelief in official data appears to have increased rapidly after epidemic rates,” he said.
Economist Prof. Dr. Veysel Ulusoy, on the other hand, said: “We have grown while unemployment has increased. We are writing stories ”.
“IF THERE ARE NO SHARE CHANGES, IT WOULD BE 1.6 PER CENT”
Analyst Fatih Sezer shared the following: “Growth in the third quarter of 2020 was heralded well above expectations. Annual growth was 6.7%. Annualized GDP fell to $ 736 billion due to the increase in the exchange rate. Gross fixed capital formation increased significantly. The change in stocks contributed 5.1 points in the third quarter of 2020. Without the change in stocks, growth would have been 1.6%. It was seen that the change in inventories over the past 4 quarters contributed to the growth.
Analyst Cuneyt Taurus “Turkey grew 6.7 percent in Q3. It is now necessary to discuss the concept of ‘inclusive growth’ instead of growth. The question of whether growth creates jobs is important but not enough.” If we look at the growth over this period in terms of income distribution, we can see the effects of the pandemic, ”he said.
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