Does the Turkish economy reflect a promising look for the future?
At the beginning of 2012 strong conservative growth forecasts were made. This was in spite of the fact Turkey had grown real fast in the last decade. At that time some were concerned that this slowdown forecast meant that growth could stop. In a way this was understandable because the retail sector in specific is normally quite vulnerable to such economic developments and real fast.
However Turkey is lucky now to have all the experience it has gained in the first crisis because the country is now able to foresee any crisis to repeat and has self-confidence it can cope with it.
Banking sector on the other hand is normally the weakest point of economies as we have all witnessed several times so far. The good news is Turkey has a strong banking system, now and the banks have certainly not failed to continue exercising financial discipline having learned much from past crisis.
The banking sector has a strong capital adequacy ratio of 16.6 percent without any liquidity problems. Credit utilization is low. The sector is in position to offer important growth opportunities in basic banking products and it is expected that profitable, valuable Turkish banks will continue to attract the attention of foreigners even in the turbulent times the world is going through.
As for economy in general again, the slowdown in growth was expected to lead to a partial contraction in current account deficit of the country and the consumer confidence has remained high.
As for domestic demand it was expected to decline but the good news it did not cease painting a much promising picture for the better times.
At the beginning of the year it was forecasted that developed countries would have to do with growth rates of 0-2 percent. In reality the picture turned out to be much worse and Spain and Italy have ended up being real nightmares for the EU and the world on top of the Greek tragedy.
Turkey on the other hand is supposed to catch a growth rate of 3-4 percent in current year.
All in all it can be said that Turkey may have to experience results of a global contraction but in any case it is now equipped good enough to accomplish a soft landing in case of an emergency.