‘TURKEY’S FRAGILITY SHOULD NOT SURPRISE ANYONE’
Experts have reported that Turkey being listed among the most fragile 15 emerging economies by US Federal Reserve (FED) should not come as a surprise to anyone. Economists indicated that the Turkish economy was experiencing fragility due to low savings rates, high current deficits, and high ratio of unemployment. US Federal Reserve (FED) announced the fragility index results for 15 emerging economies the other day. Based on this index Turkey, Brazil, India, Indonesia and South Africa are the most fragile countries where as Asian countries such as South Korea, Taiwan, and China are considered the least fragile ones.
Halit Soydan, Lecturer at IUE Department of Economics, and Former Managing Director of Yapı Kredi and Garanti Banks, pointed out that the current account deficit was above the expectations for December 2013. He said, “Current account deficit was about $ 8.3 monthly. $ 65 billion current account deficit for 2013 was approximately %8 of our national income. The deficit for 2012 was about $ 48 billion. When we look at the components of current account deficit for 2013, we can see that current account deficit for energy is $49 billion, for gold is $ 9.2 billion, and for others are $6.6 billion. Our current account deficit does not look that promising globally. With the help of recent developments and measures taken, we hope to lower it down to $ 45 billion in 2014 which would be % 5.5 of our national income.”
‘FED set off the fragility’
Prof. Dr. Hakan Yetkiner Vice Dean of IUE Faculty of Business, stated that Turkey being in the fragile country status should not surprise anyone, and he stated the following:
“Nobody should expect a steady economy in the long run where the current account deficit exceeds over 7% of gross national product (GNP) and domestic savings goes below of 10% of gross national product (GNP). The reason for Turkish economy being fragile is not because of US Federal Reserve announcing that it is gradually giving up the loose monetary policy. Turkish economy is fragile due to low savings rates, high current deficits, and high ratio of unemployment. FED’s announcement only triggered this fragility. Countries such as Turkey, Brazil, and India found themselves in these fragile status endogenous exogenous shocks against because of their wrong policies.”
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