Abdurrahman Kaan, President of the Independent Industrialists and Businessmen Association (MÜSİAD), made a written assessment regarding the first quarter growth figures for 2020 announced by the Turkish Statistical Institute (TÜİK).
Kaan noted the following in his statement:
The Turkish economy, which displayed a rather good performance and grew by 0.9 points throughout 2019, a year for which contraction forecasts had been made, also grew at a rate of %4.5 in the first quarter of 2020 and successfully overcame a critical threshold. When it is taken into account that in the same period China contracted by %6.8, the Euro Area by %3.2, Germany by %2.3, Japan by %2.0 and the United Kingdom by %1.6; while the USA was able to grow by %2.3, South Korea by %1.3, Russia by %1.6 and Indonesia by %2.3, the success of the Turkish economy will be better understood.
We will probably leave behind 2020, a year in which we had targeted growth of %5 before the emergence of the pandemic, as a period in which we could not record growth. Nevertheless, the Turkish economy, which achieved the highest growth rate among the G20 countries in the first quarter of the year after India, will regain momentum, particularly as of the second half of the year, as the negative effects of the Covid-19 pandemic begin to diminish relatively.
In the Turkish economy, which accelerated with domestic demand expanding by %6.2 in the first quarter of the year, we see that the decline in investments continues. Accordingly, investments, which decreased by %1.4 compared to the same month of the previous year, have continued to limit growth. In this period, with exports of goods and services decreasing by %1.0, the character of domestic consumption as the locomotive force of growth became evident. As in the entire global economy, we estimate that domestic demand, which tested historically low levels particularly in April and May under the effect of the Covid-19 pandemic that caused a serious crisis in the Turkish economy as well in terms of both supply and demand, will start to increase again as of the third quarter of the year.
Another point that draws attention in the growth figures is the %6.2 expansion of the industrial sector in the first quarter of 2020, a sector that was able to record a rather limited growth of 0.2 points in the whole of last year. In this period, the agriculture sector supported the industrial sector, which gained momentum with the 6.7 point expansion of the manufacturing industry, with %3.0, and the services sector supported it with %3.4. We believe that our manufacturing industry, which we believe to be the engine of growth, will decouple positively from other countries during the Covid-19 process thanks to our flexible production capacity and our proximity to large markets.
The positive effects on markets of the supports and incentives taken by the economic administration, which as of the period exceed TRY 260 billion, will become even more evident during and after the normalization process that will begin as of June. Based on these developments, as MÜSİAD we estimate that momentum in the Turkish economy will turn positive rapidly as of the second half of the year.