Turkey’s economy is growing 7.4% in Q3, but the lira crisis is alarming | Business and Economic Affairs

Turkey’s economy was more advanced than most of its counterparts in Q3, but inflation and the economic crisis could threaten recovery.

Turkey’s economy climbed ahead of many of its peers to increase 7.4% in the third quarter, but rising prices and falling lira mean that the explosion could be temporary.

Growth in the three months to September coincides with what nine economists interviewed with Bloomberg. Adjusted rates on time and day-to-day operations show a 2.7% increase over the previous quarter over the past three months, with total household income rising 22% as the economy rises from a higher risk of an epidemic.

The Lira weakened after the release of the data, selling 0.5% down 12.8884 against the dollar at 11:47 am in Istanbul. The price has plummeted in recent weeks as the central bank embarked on a strategy to reduce interest rates that have increased the size of the turbo but hit the money and shook confidence.

Advertisers have warned that it will not continue, saying that uncontrolled rising prices will pose a threat to growth, and even to economic collapse.

“With a recent selloff similar to the 2018 segment that triggered a recession, our hope is that economic growth will weaken further due to FX instability and a decline in purchasing power,” said Ehsan Khoman, chief executive of emerging agencies. market research in Europe, the Middle East and Africa at MUFG Bank in Dubai, he said after the announcement.

Khoman said growth could slow from the 8.8% expected this year to 3.4% in 2022, the risk will be much lower. He predicted that the central bank would continue to cut short now but would be forced to raise interest rates by up to 20% next year in order to stabilize the economy.

Inanc Sozer, an economist at Virtus Glocal Consulting from Istanbul, said the economy would collapse even next year if the central bank continued its current path.

Turkey’s largest bank has cut 4 percent on lending since September, with President Recep Tayyip Erdogan pushing for a revival of its popularity ahead of the 2023 elections by offering greater growth and more jobs.

Rising inflation has reached purchasing power, however, which means that real GDP growth among the Group of 20 countries does not translate into a better life for many families.

Even expatriates benefit from a weaker lira and owners are contributing to rising rents and housing prices, among the worst affected by Turkish workers – the Erdogan culture.

Below are some of the highlights from the GDP report released by Ankara State Accountants on Tuesday:

• Domestic spending – estimated to account for one third of the economy – continues to be one of the main causes for growth. It jumped 9.1% from a year ago.
• Annual GDP grew to $ 795.2 billion in the third quarter from $ 765 billion over the past three months.
• Exports jumped 25.6% year-on-year. Exports fell by 8.3%.
  Establishment of fixed income, business capital growth, decreased by 2.4%.
• Government revenue rose 9.6% after a 3.4% increase in the previous quarter.

Progressive indicators show that employment remains strong in the fourth quarter despite the economic gains down 99.3 in November, compared with 101.4 last month.

Central Bank Governor Sahap Kavcioglu will chair the next price-fixing meeting on Dec. 16, and Erdogan continues to press for lower prices.

(Review and future guidance from experts)
-With the help of Ugur Yilmaz.