Macroeconomic Indicators of Turkey

Topics: Inflation, Monetary policy, Macroeconomics Pages: 15 (5036 words) Published: April 24, 2013
* Economics Project Report

* Macroeconomics Factors of Turkey

Submitted By: Submitted To: Vivek Pandey Prof. Mani Govil Nitish Sharma
Manali Champak
Gaurav Mevawala
Monika Shrivastava

* Turkey History

Anatolia (Turkey in Asia) was occupied in about 1900 B.C. by the Indo-European Hittites and, after the Hittite empire's collapse in 1200 B.C. , by Phrygians and Lydians. The Persian Empire occupied the area in the 6th century B.C. , giving way to the Roman Empire, then later the Byzantine Empire. The Ottoman Turks first appeared in the early 13th century, subjugating Turkish and Mongol bands pressing against the eastern borders of Byzantium and making the Christian Balkan states their vassals. They gradually spread through the Near East and Balkans, capturing Constantinople in 1453 and storming the gates of Vienna two centuries later. At its height, the Ottoman Empire stretched from the Persian Gulf to western Algeria. Lasting for 600 years, the Ottoman Empire was not only one of the most powerful empires in the history of the Mediterranean region, but it generated a great cultural outpouring of Islamic art, architecture, and literature.

After the reign of Sultan Süleyman I the Magnificent (1494–1566), the Ottoman Empire began to decline politically, administratively, and economically. By the 18th century, Russia was seeking to establish itself as the protector of Christians in Turkey's Balkan territories. Russian ambitions were checked by Britain and France in the Crimean War (1854–1856), but the Russo-Turkish War (1877–1878) gave Bulgaria virtual independence and Romania and Serbia liberation from their nominal allegiance to the sultan. Turkish weakness stimulated a revolt of young liberals known as the Young Turks in 1909. They forced Sultan Abdul Hamid to grant a constitution and install a liberal government. However, reforms were no barrier to further defeats in a war with Italy (1911–1912) and the Balkan Wars (1912–1913). Turkey sided with Germany in World War I, and, as a result, lost territory at the conclusion of the war.

* Economic Performance

The rapid recovery of the Turkish economy after the crisis of 2001 was to a large extent due to tight monetary and fiscal policies, as well as to structural reforms. The main anchors of the Turkish economy are its close connection to the IMF and its goal of becoming an EU member state. Although the economy was hit hard by the financial crisis, recovery was rapid and sound. Turkey has the world’s 15th largest GDP-PPP and the 17th largest nominal GDP. GDP grew from $647.155 million (equivalent to $13.163 per capita) in 2007 to $730.337.5 million (equivalent to $14.068 per capita) in 2008, and then fell to $617.099 million (equivalent to $13.905 per capita) in 2009. Growth in the 2005 – 2008 period slowed down from 8.4% to 0.7%, followed by a contraction of some -4.7% in 2009. Recovery began in the second quarter of 2009, and growth expectations for 2010 onwards remain soundly over 5% (record growth rates of more than 10% were observed in the first two quarters of 2010). Having risen by 17.55% and 29.68% in 2007 and 2008 respectively, exports decreased by some 5.4% in 2009. Imports had already begun to decrease in the 2007– 2008 period by some 4.4%, and fell sharply by 14.4% one year later. Inflation, still at 10.4% in 2008, fell to 6.3% in 2009. Net public debt to GDP has fallen from 92% in 2001 to under 60% in 2005 and to around 50% at the end of 2006. In 2009 it reached 45.4%.

* Balance of payment (in USD million)- 2011
Current a/c- -77,238
Capital a/c- -30
Final a/c - -66,370
Net errors n omissions- 11,912
Global balance- 1,014
* Exchange rate –
Turkey currency is TURKISH LIRA
1 US dollar = 1.77 Turkish lira
* INTEREST RATES- turkey follows progressive taxation method. Personal income tax rate...
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