Why Turkey’s growth data has economists scratching their heads
Turkey’s latest growth data, which suggests the economy rebounded strongly in the fourth quarter of 2016, appears out of sync with other key indicators, fueling doubts over Ankara’s new calculation method.
On the data calendar of the Turkish Statistical Institute (TUIK), March 31 was the day to release the country’s fourth-quarter economic growth for 2016 and thus the overall rate for the year. The figures came as a surprise. Following a contraction in the third quarter, the Turkish economy rebounded strongly in the fourth quarter, growing 3.5%. This put the overall growth rate for 2016 at 2.9%. Hungry to showcase some economic success, Ankara was in an upbeat mood, but the figures rekindled questions on just how reliable the data is — a debate that had flared in December, when TUIK announced a retrospective revision of whole data sets, using a new calculation method.
For the majority of Turkish economists, excluding those who curry favor with the government, the credibility of the data is questionable.
The introduction of a new calculation method last year had resulted in a staggering upward revision in the gross domestic product (GDP) for 2015. The revised figure stood at $861 billion, a 20% increase from the original one.
According to TUIK, the Turkish economy grew 2.9% last year, based on local currency and with inflationary adjustments. When the GDP in current prices is divided by 3.04 Turkish lira, the dollar’s average exchange rate last year, the GDP amounts to $857 billion. This places Turkey among the world’s 18 largest economies. The per capita income in dollars is $207 less from 2015, but the $10,807 figure still makes the government happy.
