Last week, Türkiye's growth rates for the second quarter of 2022 were announced. The pace of growth continues unabated. Meanwhile, the PMI data, which is also a indicator of growth, has been on the decline for the last 6 months. We need to pay attention to this data. Finally, Europe is in the grips of an energy crisis. This will also negatively impact us. Today I will try to interpret all of them together.
WE HAVE BEEN GROWING FOR EIGHT CONSECUTIVE QUARTERS
Türkiye is a dynamic country. Recently, the Turkish economy has managed to grow by overcoming many political and diplomatic odds it has faced. Frankly, it is useful to note that it has accumulated serious knowledge on this subject.
The latest data released in the past days point out that the Turkish economy has achieved significant growth of 7.6%, despite the negative global picture and internal risks. With the latest data, the Turkish economy has grown for eight consecutive quarters.
When we look at the branches of economic activity, we see that the biggest growth is in finance and insurance activities with 26.6%. The services sector followed it with 18.1%, while the construction sector contracted by 10.9%. The 7.8% growth in the industrial sector is also quite remarkable.
When we look at growth with the expenditure method, we see that the consumption of domestic residents increased by 22.5%. On the other hand, the increase in exports of goods and services was realized as 16.4%.
WHAT DOES THE PMI DATA SAY?
PMI data is among the leading indicators of growth and is used to track the purchasing trends of companies' purchasing managers. As I have stated in detail in my previous articles, this data is extremely important in terms of reading the state of the manufacturing industry. When the data in question is above 50 points, it indicates growth, and when it is below it indicates contraction.
The PMI data announced last week was realized in a way that indicates an increase relative to the previous month. According to the latest data, the PMI index rose to 47.4. This data was 46.9 in July. Although we have seen an improvement this month, when we look at the general situation, we see that the PMI index has been below 50 points for the last six months.
HOW DOES EUROPE'S ENERGY CRISIS AFFECT US?
Countries in continental Europe are Türkiye's most important trade partners. If we include the UK, almost half of our total foreign trade is with Europe. Therefore, the slowdown or contraction in the European economies also negatively impacts the Turkish economy.
Europe is in the midst of an energy crisis right now and it looks like this crisis will deepen towards winter. Electricity and natural gas cuts are looming for the European industry. There is a consensus in almost all forecasts that the European economy will enter a recession. It is obvious that this negative picture will bear negative impacts on Türkiye as well. The contraction in Europe will particularly negatively affect our exports. Meanwhile, the forced contraction of Europe due to the energy shortage may open export markets to Türkiye, which will be vacated by European countries. In a nutshell, we are in a period that needs to be planned and managed very carefully. There are both risks and opportunities ahead.