The Turkish Statistical Institute (TUIK), an official agency attached to the prime minister’s office, had announced a while ago its intention to change the calculation method used to determine the country’s main economic indicators. The new method was to be based on ESA2010, the European Union’s accounting framework, to align with the way EU countries calculated their gross domestic product (GDP). With this explanation at hand, the planned change seemed necessary and reasonable.
On Dec. 12, however, the release of the new GDP data sparked myriad objections and criticism disputing the scientific merits and objectivity of the way the revision was made. Pundits had been especially curious about the third-quarter growth rate, which was expected to be in the negative. So it turned out, but according to the TUIK, the economy contracted 1.8% in the third quarter, well beyond the 0.5% expected in line with earlier data sets. Then the entire picture painted by the new calculation method raised questions, both in terms of methodology and consistency.
According to the new data, Turkey’s GDP was, in fact, bigger than what the previous calculation had found. The difference is staggering — nearly 20%. In 2015, for instance, the Turkish economy was said to have produced goods and services worth 1.953 trillion Turkish lira at current prices. The new calculation method puts the figure at 2.338 trillion, meaning that an extra 385 billion Turkish lira in GDP had been somehow “discovered.” This amounts to about $140 billion, based on the average exchange rate last year. So the Turkish economy’s size for 2015 grew from $718 billion to $857 billion overnight. Accordingly, the per capita income also increased — from $9,257 to $11,082.
The revision is said to be made according to EU standards, but unlike the EU, which took 2010 as the basis year, Ankara opted for 2009, a crisis year in which the Turkish economy had contracted by about 5%. Relevant to 2009, GDP increases in following years turned in bigger, meaning that an important part of the overall increase stemmed from the choice of a problematic basis year.
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