Turkey Avoids Recession Despite Tightening Monetary Policy

Turkey’s economy avoided a recession in the third quarter of 2023,
despite tightening monetary policy by the Central Bank of Turkey.

Content
The details

Analysis

Conclusion

The details

Turkey’s GDP grew by 0.3% in the third quarter, compared to the second quarter, down from 3.3% in the second quarter.

On an annual basis, Turkey’s GDP grew by 5.9%, compared to 3.9% in the second quarter.

The slowdown in growth is due to several factors, including:

Tightening monetary policy, with the Central Bank of Turkey raising its key interest rate to 40% in November 2023, after raising it by around 15 percentage points during the third quarter alone.
A decline in demand for Turkish exports due to the slowdown in Europe, where Turkish import prices have risen sharply, leading to higher production costs and a decline in the ability of Turkish companies to compete in foreign markets.

Analysis:

Turkey’s avoidance of a recession in the face of tightening monetary policy is an important achievement for the Turkish government,
as it suggests that the new economic policies that were adopted after the presidential elections in May last year have begun to yield positive results.

This achievement confirms the importance of the gradual approach taken by the Central Bank of Turkey in tightening monetary policy,
as it gave Turkish companies time to adapt to changes in policy.

However, the Turkish economy still faces major challenges, including high inflation,
depreciation of the Turkish lira, and declining investor confidence.

Conclusion

Turkey’s economy avoided a recession in the third quarter of 2023,
thanks to the gradual approach taken by the Central Bank of Turkey.
Despite the major challenges facing the Turkish economy,
avoiding a recession is an important achievement for the government.

Turkey Avoids Recession Despite Tightening Monetary Policy

Turkey Avoids Recession Despite Tightening Monetary Policy

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