Spotlight: Turkey falls in recession ahead of key local elections

Source: Xinhua| 2019-03-15 19:58:52|Editor: xuxin
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by Burak Akinci

ANKARA, March 15 (Xinhua) -- Turkey tumbled into a recession, its first in a decade of continuous growth under President Recep Tayyip Erdogan, who is facing critical local elections this month, perceived as a test for his leadership.

The economy shrank by three percent in the fourth quarter of 2018 compared with the same period of the previous year.

Growth came in at 2.6 percent for 2018 GDP overall, but that was still much lower than the 7.4 percent recorded in 2017, a turbulent period following the 2016 failed coup against Erdogan and terror attacks in major cities.

Private consumption plunged by an annual 8.9 percent last quarter, with Turkey's GDP per capita falling to 9,632 U.S. dollars from a little over 10,000 U.S. dollar in 2017.

Despite the downturn, Treasury and Finance Minister Berat Albayrak said that the "worst is now behind."

"Turkey's economy is on track for a rapid recovery. Rising exports and tourism income will be the key drivers for growth," he said on his Twitter account.

But some experts predicted hard time ahead for Turkey's embattled economy.

"The worst is certainly not behind. We are right in the middle of it. Turkey will experience another two to three quarters of downturn this year," said economist Yalcin Karatepe from Ankara University to Xinhua.

"Inflation and unemployment will still be high during this period, harming living standards of citizens," said the academic, arguing that the government was only implementing "palliative measures" to ease some of the urgent tensions until the local elections.

"The government is trying to make things pass until the elections, but this situation will not go away in a matter of days or weeks," added Karatepe.

Turkey enjoyed more than a decade of uninterrupted high growth until a currency collapse last summer triggered by U.S. President Donald Trump, hitting Ankara with sanctions over the detention in Turkey of an American clergyman, who has since been released.

The severe spat sent the Turkish lira crashing against the U.S. dollar, a depreciation of nearly 30 percent that caused 20 percent inflation and 12 percent unemployment. Many businesses went bankrupt.

Many businesses borrowed large sums of foreign money to invest in big infrastructure projects in Turkey, such as the massive new Istanbul international airport.

But now that foreign investment has considerably slowed down coupled with Turkey's domestic problems.

The Turkish president has repeatedly blamed speculators and foreign powers for sinking his country's economy and he is campaigning in favor of his Justice and Development party (AKP) in daily rallies across the country promising that the setback in economy is only a temporary phenomenon.

"There's been unfortunately a negative growth (decline) but we have managed to fend off these attacks on our economy and we will continue with determination our path toward stability," he said to his supporters on Monday in Istanbul.

With nearly three weeks left for the elections, polls suggest that Turkey's main cities hang in the balance as the economy is the number one concern for voters.

"There is a direct relation between the stomach and the vote and people," said Murat Balci, a lottery vendor in Ankara's downtown Kizilay.

"People have even given up to their dreams of getting rich," he said with a smile, explaining that his sales went down in last month.