Turkish economy grows in second quarter of 2021

By Azernews

By Vugar Khalilov

A 21.7-percent growth was recorded in the Turkish economy in the second quarter of 2021, Yeni Shafak newspaper has reported.

The country’s economy, which grew by 1.8 percent due to the challenges caused by the pandemic, saw a 7-percent growth in the first quarter of 2021, the report added.

The third-quarter growth that is to be announced next week, is also expected to be in double digits. The indicators show that strong growth will follow in the last quarter of 2021 as well and Turkey will end the year with an overall 9-10-percent increase.

The performance in exports, which is one of the items that strongly support growth, is astounding. Compared to $169 billion exports carried out last year, Turkey has increased its exports by approximately $50 billion since early 2021. Turkey's 12-month exports reached $215.7 billion by late October.

The exporting enterprises, which have difficulties in meeting the foreign orders, have filled their order quotas in many sectors up to the next six months ahead. The strong performance in exports played a major role in reducing the foreign trade deficit, which was $43 billion last year, to $18.4 billion. The ratio of exports to imports increased to 84.3 percent.

According to the 2021 World Investment Report of the United Nations Conference on Trade and Development (UNCTAD), global international direct investments, which were recorded as $1.5 trillion in 2019, decreased by 35 percent and equaled to $999 million in 2020.

Turkey managed to get a share of $7.9 billion from the shrinking global investment pie in the challenging pandemic environment. The amount of international direct investment in Turkey in January-September 2021 amounted to $9.8 billion.

Turkey, which managed to attract more investments in 2021, is expected to close the year with approximately $12 billion.

The most important data regarding the production wheel in the economy is the capacity utilization rate, which has been at the peak of recent years. As of November 2021, the capacity utilization rate reached the highest level of the last three years with 78.1 percent.

Turkey possesses a very strong financial structure in terms of the public debt and the budget deficit ratio to the Gross Domestic Product (GDP) compared to international standards.

In the government's projection for 2021, the ratio of budget deficit to the gross domestic product was targeted as 4.5 percent. This rate, which has been reduced to 3.5 percent at the moment, is expected to decrease further by the end of the year.

While 60 percent is considered the threshold that should not be exceeded in the Maastricht Criteria determined by the European Union for member states, the ratio of Turkey's public debt to gross domestic product amounts to 39.5 percent.

Furthermore, with the 614,891 sold units the Turkish automotive market grew by 4.5 percent in January-October 2021 compared to the same period of the previous year. The automobile sales increased by 2.2 percent (475,312 units) compared to the same period of 2021. The sales of light commercial vehicles also saw 13.2-percent (139,579 units) growth.

The sales of heavy commercial vehicles, increased by 69 percent in the first 10 months compared to the same period of the previous year and rose to 19,845 in total. Some 13,406 tow trucks and 6,439 trucks were sold during the reported period that set a new record in the last six years.

Major appliance sales across Turkey increased by 9 percent in January-October 2021 compared to the same period of 2020. Overall 7.32 million products were sold in six main groups of the major appliances in the reported period and exports increased by 24 percent to 21.5 million units.

The home sales decreased by 15.2 percent in January-October compared to the same period of 2020 and amounted to 1.86 million. In October, 137,401 houses were sold throughout Turkey. The number of houses sold in October increased by 14.9 percent compared to the same month of the previous year.

In January-October, the number of foreign visitors to Turkey reached 21 million with 87.98 percent growth. Tourism revenues, which went up to $16.8 billion in the first nine months of the year, are expected to reach $22 billion in the last quarter of 2021.