ULUSKON PRESIDENT NEZAKET ATASOY: TURKEY'S GROWTH RATE IS HIGH AGAINST INFLATION

INTERNATIONAL Investment and Business Confederation (ULUSKON) Chairman and International Human Rights Defense Committee (IHRDC) Goodwill Ambassador Nezaket Emine Atasoy said, “Although inflation is very high in Turkey, the growth rate is also high. In this context, it should be aimed to implement a sharp export-oriented strategy, and to encourage European companies, which have difficulty in producing in their own countries due to energy restrictions and increasing costs, to quickly move some low-investment production mechanisms to Turkey.

ULUSKON President Courtesy Emine Atasoy evaluated the economic situation around the world. Atasoy said, “As it is known, markets around the world are shaped by the US economy and the monetary policies of the Federal Reserve Bank (FED). The US economy, which accounts for 22 percent of the World's Gross Domestic Product (GDP), sounded recession alarms these days. On the other hand, the risk of contraction and recession in the German economy, which is the locomotive of Europe, is increasing. Economic growth is expected to stall as of the third quarter due to the energy bottleneck in EU countries, which have decided to reduce their use by 15 percent as a remedy for the reduction in natural gas shipments from Russia. A similar situation in the economy is also valid for the UK, which left the European Union (EU). Contrary to Europe, which is trying to balance the economy with interest rate policies, China prefers to reduce interest rates in order to revive its economy whose growth rate is slowing down. Despite this, it is said that the slowdown in the Chinese economy has already begun. It is evaluated that this situation will hit South American and African countries that export precious metals to China, and eventually trigger a global recession, including the USA.

Recession Expectation in the European Union

Noting that the recession expectation in the EU, which is Turkey's main market, will adversely affect investment, production and employment in Turkey, Atasoy said, “Increasing inflationary pressure in the domestic market and the negative effect of decreasing purchasing power may trigger a downward movement in prices. Such a move, which can be seen as positive for households, will cause our producer companies to experience bilateral difficulties in domestic and foreign trade. When we take into account the very high cost and interest inputs, it will not be possible for our industrial companies to make new investments and increase their capacities, and to engage in employment-creating activities in this environment. Even if not in the third quarter of this year, the depth of the recession to be experienced in the EU as of the fourth quarter may seriously affect our economy in the coming winter months. Increasing export figures and rising GDP with the impact of the extreme depreciation of TL throughout 2022, unfortunately, do not make the increase in exports sustainable for the near term, with the effect of the global contraction. The rise in world energy and commodity prices not only takes away the capacity of Turkish industrialists to produce at competitive prices, but also causes our import bill to rise even more.

'OBSTRUCTIONS SHOULD BE TARGETED WITH PRACTICAL SOLUTIONS'

Expressing that the growth rate is high despite the high inflation rate, Atasoy said:

“Although the inflation rate is very high, the growth rate is high in Turkey, which currently has to borrow foreign currency at a high cost and therefore its economy is technically extremely fragile. Therefore, it can be argued that as long as the unemployment rate does not rise further, even if there is a short-term recession in economic life, 'the crisis may pass tangentially to the Turkish economy'. It should be aimed to implement a sharp export-oriented strategy, and to encourage European companies, which have difficulty in producing in their own countries due to energy restrictions and increasing costs, to quickly move some low-investment production mechanisms to Turkey. It should be aimed to obtain the financing input needed by Turkish industrial companies for new investments from European banks at low cost through European companies, and to overcome the possible obstacles that prevent EU companies from making joint investments with Turkish companies with practical solutions and a race against time approach."