it is Now official: The Turkish economy is in a recession and the Outlook for the current year are not exactly rosy. This is bad news for the Turkish government before the local elections at the end of March.
The Turkish economy contracted in the fourth quarter of 2018, around three percent compared to the same period last year, the Turkish statistics Agency (Tüik) announced. This was the second quarter in a row in which the economy shrank. According to a popular Definition, Turkey is in a Phase of recession. It is the first Time since 2009.
In the final quarter made the long-booming construction industry springs: they shrank to 8.7 percent, while it fell in industry by more than six percent. Private households held back noticeably, and signaled with an output decline of around nine per cent, a weakness of domestic consumption.High Inflation and, at best, weak growth
the growth in the past year was, According to the statistics Agency, a total of 2.6 percent. In the previous year it had achieved in spite of the political turmoil after the coup attempt of July 2016, up from 7.4 percent. In the summer, the Turkish currency collapsed in the midst of a diplomatic crisis with the United States. In consequence, Inflation had soared, while the economy had shrunk in the third quarter to 1.6 percent.
For the Islamic-conservative justice and development party (AKP) and President Recep Tayyip Erdogan get the data before the local elections on October 31. March inconvenient. The Turks have been suffering for months under the high Inflation of just below 20 percent. In order to meet the increase in the price of food, the government has established urban stalls for cheap vegetables.
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And the prospects are relatively modest: The Rating Agency Moody's expects for the current year, with a Shrinking of the GDP to two per cent. With a Plus of 0.4 percent, the estimate of the IMF is more optimistic, but it threatens, at least, a standstill. Turkish citizens have lost confidence in the Lira and put their savings in foreign currencies.
In the last week, the Turkish Central Bank had left key interest rates unchanged at 24 percent. "Although the monetary policy in Turkey can be referred to in comparison to the Standards in the United States, the United Kingdom or in the EMU, hardly as an independent, seems to be the fight of the still elevated price pressures to be high on the Agenda of the Central Bank and by President Erdogan," said DZ Bank.