Important developments that occurred in the Turkish economy during the last week indicate the beginning of its recovery in light of its suffering as a result of internal structural factors and external interventions. Will this be reflected in the problem of inflation, the exchange of the lira and the rise in prices inside the country?

Are we witnessing a reduction in the interest rate in the coming period?

The Turkish economy topped the indicators of global economic growth, as Turkey ranked second after Britain among the most developed OECD countries during the second quarter of 2021, with a growth rate of 21.7%.

Turkey also ranked third in the number of international contracting companies with a total of 40 companies, after China (78 companies) and the United States (41 companies), and the evaluation of these companies was based on the revenues they obtained from their work abroad during the previous year, according to what was published by the magazine Engineering news log.

According to the Turkish Statistics Authority, Turkey's exports abroad exceeded 121 billion dollars during the first seven months of this year, while the country is looking to reach 210 billion dollars by the end of this year.

Official data showed that Turkey exported passenger cars to more than 100 countries, territories and free trade zones within 7 months, at a value of $5.5 billion.

According to official data, Turkish industrial production increased 13 times during the last 14 months, and Turkish exports increased by 70% in the second quarter of this year, achieving the highest quarterly performance in Turkey's history by 55 billion dollars, and Turkey's exports also exceeded in the past 12 months $200 billion for the first time in its history.

Turkey was not satisfied with the production of its weapons, ships and missiles, but also exported some of them, as its defense and air exports exceeded $3 billion.

The Turkish economy achieved a growth of 7.2% in the first quarter of this year, to continue to rise in the second quarter to the highest declared growth rate since 1999.

The leading international institutions in the economy began adjusting their expectations for the Turkish economy, whose performance accelerated with the economic recovery (Al-Jazeera)

international institutions

The leading international institutions in economics and finance began adjusting their expectations for the Turkish economy, whose performance accelerated with the continuous global economic recovery and progress in vaccination against Corona.

The first change came from Moody's, the international credit rating agency, which revised its forecast for Turkey's economic growth from 5% to 6% for the current year.

It raised its forecast for economic growth in Turkey for 2022 from 3.5 to 3.6%, noting that progress in vaccination and recovery in the tourism sector supports growth.

Major US investment banks also revised their forecasts positively, as JP Morgan raised its growth forecast for Turkey from 6.8 to 8.4%, due to strong domestic demand and a recovery in exports.

In turn, Goldman Sachs raised its forecast for the growth of the Turkish economy this year from 7.5% to 9.5%.

As for the International Monetary Fund, it positively revised its forecast for the growth of the Turkish economy from 5.8% to 6% in 2021, and from 3.3 to 3.5% for 2022.​

For its part, the global "Bloomberg" confirmed that the value of the Turkish gross domestic product during the last quarter amounted to 1.581 trillion liras (188.566 billion dollars), compared to 1.03 trillion liras (175.5 billion dollars) on an annual basis.

growth and recovery

Central Bank Governor Shihab Kavuoglu announced - during a meeting organized by the German-Turkish Chamber of Commerce and Industry and the Turkish Central Bank - that his country was among the economies that made progress in supportive financial and monetary policies and immunization programs, and achieved successes in containing the Corona pandemic, which was positively reflected on production, investment and employment.

He stressed that the temporary factors affecting inflation expectations will lose their effect in the short term, and inflation will enter a downward trend during the last quarter of this year, noting that Turkey's foreign exchange reserves range between $115 billion and $120 billion.

In turn, Turkish Trade Minister Mehmet Muş said, in a tweet posted on his Twitter account, "The contribution of our exports of goods and services to growth reached 10.8 points, this value is the highest contribution recorded since 1998, and we will continue to grow based on investment, production and exports."

On August 20, 2021, Turkish Treasury and Finance Minister Lutfi Alwan said that Turkey's economy is expected to grow more than 8% during 2021, in the absence of any external shock related to the Corona pandemic.

Alwan explained that the trend of gradual recovery in the service sector, especially in tourism, continues with the increase in the vaccination rate in the country, stressing that the new strain of the Corona virus raises questionable questions about the strength and sustainability of the economic recovery at the global level.

Turkey ranked third in the number of international contracting companies with a total of 40 companies (Al-Jazeera)

recovery and difficulties

In this context, the economic researcher at Ege University in Izmir, Dr. Muhammad Ibrahim, stated that the recovery of the Turkish economy comes after reducing the impact of Corona on it due to the end of the closure and the administration of vaccines;

Thus, the recovery returned to what it was before the epidemic and the imposition of preventive measures.

Ibrahim told Al Jazeera Net, "The inflation rate is still high and prices have not improved. On the contrary, there has been an increase in the prices of some basic commodities, especially electricity and water bills, by about 15% and other commodities, and there has been a decrease in other commodities."

He pointed out that the exchange rate of the lira is still witnessing fluctuations during the recent period, although it is less severe than in previous periods, and it is expected that interest rates will decrease in the coming period to drive economic growth.

"In general, the Turkish economy is still facing difficulties, despite its relatively recovery compared to its condition before the closure," added the economic researcher at Ege University.

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