Conexio consulting


While the end of a year is near, in which cyclic political movements were pursued and geopolitical risks did not fall from the agenda, the desire to dominate the economic system underlying the political conflicts between the countries and the developments in the trade war in parallel became the main issue affecting markets and economic decisions in 2019.
Within the framework of the developments, the fact that the leading central banks such as the US Federal Reserve (Fed) and the European Central Bank (ECB) returned to the easing of monetary policies in order to support the economy reduced the risks related to the economy.
All the domino effect brought about by globalization in line with which, as in all countries of the internal developments in Turkey’s economy by the emergence of many external developments has been a year. Within the framework of the risks and domestic developments abroad, economic management prevented harsh swings in the economy both through the measures it announced and the reforms it implemented throughout the year. Thus, in 2019, Turkey has declined to single digits in the 20 percent inflation, recession during the transition to the re-growth in exports and a record that was a record-breaking year of current account surplus seen.
According to TurkStat data, inflation in January held at 20.35 percent in Turkey, in a stepwise manner through October fell to 8.55 percent decline. Inflation, which rose to double digits again with 10.56 percent in November, is expected to complete the year at a level close to 12 percent, which is the target of the New Economic Program (YEP).
On the growth side, it was seen that the transition from the balancing process to the transformation process during the year. In this sense, completed last year with a growth of 2.6 per cent of Turkey’s economy, the first quarter of 2019 narrowed 2.3 percent and 1.6 percent in the second quarter. The economy, which grew by 0.9 percent in the third quarter, is expected to complete 2019 with a 0.5 percent increase in GDP.
The current account deficit, which was the lowest level in the last 9 years with USD 27.6 billion last year, has gradually increased in 2019. Turkey, in June gave more than the first time after nearly 17 years in the last 12 months of current account balance.
This year, it was noteworthy that the economic indicators should be close to the targets set in the YEP, which increased confidence in the framework set for the 2020 program. The inflation targets in the YEP are 12 percent, 8.5 percent, 6 percent and 4.9 percent for 2019, 2020, 2021 and 2022, respectively. In the program, the unemployment rate is expected to be 12.9 percent in 2019, 11.8 percent in 2020, 10.6 percent in 2021 and 9.8 percent in 2022. Growth targets are 0.5 percent for 2019 and 5 percent for the next 3 years.
According to the December survey conducted by the CBRT in a comprehensive manner with the real sector, financial sector and professionals, inflation is expected to be 11.62 percent at the end of 2019 and the economy will grow by 0.4 percent.
According to the survey, inflation is expected to be at 10.07 percent, 3.2 percent and policy rate at 10.60 percent for the next 12 months.