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2018 fraught with uncertainties for Turkish economy

Despite its spectacular growth this year, Turkey’s economy is burdened with serious problems and fragilities that might spoil the party next year.
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As expected, Turkey this month posted a sensational growth rate for the third quarter of 2017. The economy ostensibly grew 11.1%, which put the overall rate for the first nine months at 7.4% and the year-on-year rate at 6.5%. The figure, which casts Turkey as one of the world’s fastest growing economies after China and India, means that the government’s projection of a 4.4% growth rate for 2017 will be easily surpassed. Yet the other side of the coin is not as shiny as the growth numbers suggest at first glance. Under the veneer of success, the Turkish economy’s growth involves arithmetic illusions, fragilities and a chemistry that accumulates stress.

The impressive growth figures this year are the result of internal and external “doping,” in addition to the base effect of last year’s growth, which stood at 3%. The “miraculous” 11.1% rate of the third quarter, in particular, owes much to the base effect of the same period last year, when the economy contracted by about 1%, something the ruling Justice and Development Party is notably trying to obscure.

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