Caspian Report - Issue 06 - Winter 2014

The recent numbers released by Turkish
Statistical Institute confirmed again Turkey’s
high level of dependence on imported
energy and the danger that this creates for
long-term sustainable economic growth and
financial stability.
The recent numbers released by
Turkish Statistical Institute confirmed
again Turkey’s high level of
dependence on imported energy
and the danger that this creates for
long-term sustainable economic
growth and financial stability. According
to the figures, the total energy
imports of Turkey in 2013 has
reached to 55.9 billion dollars which
makes about 22.2% of total imports
and about 56% of total trade deficit
of the country. The good news is
that although the economic growth
rate is expected to be higher in 2013
compared to 2012, the total energy
imports of Turkey have declined by
7% in 2013.
Turkish economy has realized significant
macroeconomic developments
TURKISH
ECONOMY
HAS REALIZED
SIGNIFICANT
MACRO
ECONOMIC
DEVELOPMENTS
OVER THE LAST
TEN YEARS.
over the last ten years. Large budget
deficits and high inflation rates were
the two main important problems of
1990s. Fiscal discipline that has been
adopted by the AK Party government
considerably reduced the public sector
borrowing requirement and this
in turn led to a decline in the interest
rates. Along with the decline in
the interest rates, inflation rate went
down to single digit levels. The economy
was severely hit in 2009 global
economic crisis but as opposed to
developed economies there was a
very sharp and quick recovery in
2010 and 2011.
By the end of 2011, the authorities
have realized an important economic
problem of Turkey when the
current account deficit reached to 75
billion dollars which is about 10% of
Turkey’s GDP in that year. High level
of current account deficit makes
Turkey highly dependent on foreign
savings in order to be able to realize
economic growth. This creates an
important macroeconomic deadlock
for the economy in terms of creating
a trade-off between economic
growth and current account deficit.
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CASPIAN REPORT, WINTER 2014