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Turkey’s recession becomes official

The shrinking Turkish economy needs external funds to start growing again, but luring foreign investors back is a tall task that Turkey is unlikely to accomplish in the short run.
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The Turkish economy entered turbulence in the second half of the year amid a sharp increase in foreign exchange prices, which, in turn, fueled inflation. Though the president maintained there was no crisis, successive indicators spoke of a rapid downturn. Finally, the growth data for the third quarter — released Dec. 10 by the Turkish Statistical Institute (TUIK) — offered a telling picture of what is going on.

According to TUIK, Turkey’s gross domestic product (GDP) grew only 1.6% in the third quarter, down from 5.3% in the second quarter and 7.2% in the first one — a sharp decline that matches the definition of recession. For Turkey’s economy, a growth rate of 5% to 6% is considered “the normal.” Thus, the 1.6% rate in the third quarter indicates that the economy is now “officially” in recession.

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