Although the Turkish economy (
) grew at a much slower pace year-over-year, the underlying
fundamentals in the country look relatively strong assuming Europe
returns to growth in the near future.
[caption id="attachment_63809" align="alignright" width="300"
caption="The Turkish economy's dynamism makes it a good bet once
the global economy recovers"]
According to figures released Monday, the
Turkish economy grew 2.9% for the second quarter of
; a far cry from the 8+% growth Turkey experienced during
2010-2011. However, this slowdown is but one chapter in the Turkish
While its biggest trading partner, the euro zone, has fallen on
hard times, exports to the Middle East have soared. Without demand
from the Middle East, it is unclear if Turkey would have
experienced any growth this quarter.
Exports grew substantially this quarter, up 19.8%
year-over-year, even while imports dropped. This trend is crucial
for the health of the Turkish economy as it previously suffered
a crippling balance of payments deficit
. As a net importer of oil, without strong exports, this problem
would be exacerbated.
Although exports to the Middle East are superficially a good
sign, not all of the growth was organic; last quarter, Turkey
exported massive quantities of gold to Iran as citizens there
looked to diversify their holdings away from a rapidly inflating
It is clear that the Turkish economy is not in an ideal position
at this point due to the European slowdown. However, with Turkish
proving both deft and effective
in preventing the economy from overheating, lowering the
inflation rate, and ameliorating the country's trade deficit, you
could consider Turkey as a great way to play a global comeback.
If the European Union continues to introduce policy such as
increased fiscal integration and pro-growth policies, dynamic
economies like Turkey with its geo-strategic location stand to
benefit hugely from such a global turnaround.