The best and worst of the economy in 2015 - HATICE KARAHAN

The best and worst of the economy in 2015

As we enter a new year, it is time to review the previous year.

As we bid farewell to 2015, since my evaluation within the frame of the categories is appreciated by you, my precious readers, I thought to use the same format this year.

Here is the “best” and “worst” of the Turkish economy in 2015…

THE BEST PLAYER: CONSUMERS

The driving power of the increase in the Gross Domestic Product (GDP) recorded in 2015 was private consumption. The household consumption expenditure, which was relatively weaker than the previous year, accelerating in a noticeable way in 2015, played a major role in the growth.

Therefore consumers have taken the crown of the exporters, the owners of this category in 2014.

THE BEST VIEW: CURRENT ACCOUNT DEFICIT

Export, the star player of the previous year, because of developments I mentioned in this column several times in 2015, by showing a low performance detracted from the previous contributions we obtained from foreign demand.

Besides, the continuation of the weak trend in the imports in the mentioned period prevented the hard effects that would come from the net export wing.

In parallel to this, the current account deficit that gave the best view of the previous year, preserved its place in this category in 2015 as well.

However, according to the data of the first 10 months announced, as the deficit fell 24.9 percent annually, annualized current account deficit regressed to $38.1 billion.

Of course it has to be noted that the gold effect in developments has also been observed.

THE BEST SUPPORT: OIL

The rapid continuation of the free fall in 2015 that started in oil prices in 2014 especially relieved us in the current account.

Both regression in energy importation and unit value detail of this in the indexes, have been proving the “direct” support of oil in the Turkish economy in 2015…

THE BEST FOREIGN PLAYER: SWITZERLAND


In addition to portraying a negative image in 2015, it also saw increases in some markets.

Among them, with its growth and positive contribution on export development accordingly, the most outstanding market was Switzerland. Through this contribution which we could say came with the gold effect, the fall of our export slowed down a little.

Even if Germany which was rewarded in this category last year lost its place to Switzerland this year with regards to contribution, it continued to be our export market “champion in value.”

THE WORST FOREIGN PLAYER: RUSSIA


While Iraq was the worst foreign player in 2014 with its export performance downfall, Russia took this title in 2015. Russia which was elected for this category as the market pulling down our export development rate in the hardest way with an almost 40-percent shrinkage, with the latest developments experienced, is fully deserving of this title.

THE BEST SECTOR: FINANCE

Finance was the best sector for our growth tempo in 2015. Within the frame of data announced in the first three quarters, finance left the production industry in 2015 quite behind, while it staged a performance at par last year.

Just at this point from the aspect of sectorial recovery, I must emphasize agriculture.

Agriculture which affected our growth negatively in 2014, was the strongest rising sector.

THE FASTEST RISING: EXCHANGE RATE


We can protect the exchange rate that took place in this category in my article last year for 2015 as well. Especially within the context of USD…

The USD/TL exchange rate that has been climbing with domestic developments and the Federal Reserve Bank (Fed) process, continued its increase with similar dynamics in 2015 as well and with an almost 25 percent increase was the fastest rising “effective” parameter.

THE WORST FOREIGN EFFECT: THE FED


While talking about the exchange rate, in the category of the worst foreign effect we should ignore to note the Fed.

Just as happened in 2014, the Fed, which caused a panic attack in markets during 2015, continued to make an effect that was unsympathetically reflected to many developing countries like Turkey.

The stress that accumulated for some time, although slightly relieved with the interest rate increase that came in the last month of the year, the Fed's normalization story is yet at the beginning of the road…

THE WORST DOMESTIC EFFECT: ELECTION RUSH

We can say that the most “extensive” domestic negative effect in 2015 is election pomposity.

However, the first half of the year focusing on the June elections, and the second half on November elections with uncertainties, (even if we show a growth of almost 4 percent) it means that we left behind a year which we could have spent more effectively.

LET 2016 BE A TURNING POINT

Here our economy in 2015, roughly shaped with the leading effects of these basic factors, we left a modest year behind.

Since a reasonable tempo is possible for 2016, in which we entered a new period by finalizing elections, downward global risks and terror have been remarkable as basic negativity.

Meanwhile, if we focus further, 2016 can be a turning point to be the architect of the future.

So, let me finish by repeating my wish, which did not come true when I wrote my article to welcome 2015:

In hopes that 2016 does not drown in its own dynamics and becomes a determined and different year focused on the long term, I wish a good new year for our country.

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