How well did the Turkish economy do over the last decade?

There has been much discussion in Turkey in recent days about the performance of the economy under the AKP government, occasioned in part by an exchange I had with Minister of Finance Mehmet Şimşek.

The Turkish government likes to claim that the GDP expanded by more than three-fold between 2002 and 2012. This is a misleading number, as it is based on the dollar valuation of Turkish GDP at current prices, and hence lumps both dollar inflation and the real appreciation of the Turkish lira on top of real growth. Calculated properly, real GDP (or GDP at constant prices) rose by 64 percent during 2002-2012, and real GDP per capita by 43 percent.*

This is not a bad record of growth. An increase of 43 percent in income per capita over a decade implies an annual growth rate of 3.6 percent. This is a performance that matches that of Turkey’s previous high-growth period (1960-78) and exceeds anything experienced since.  

In 2002, Turkey was just coming out of a severe financial crisis, so there is a case to be made that any growth calculation that takes 2002 as the base year mixes up real growth with the bounce back from the crisis. There is also the question of sustainability, as growth has been fuelled by large current account deficits in the recent period. I will not elaborate on these issues in the present discussion.  (See here for a more analytical look at Turkey’s recent growth experience.)

However, an important issue that is frequently overlooked is the conjunctural and comparative dimension. The last decade has been an exceptionally good one for developing countries as a whole. When Turkey’s performance is compared to the average for emerging and developing countries, it hardly looks distinguished. This can be seen from the figure below.

Source: Conference Board database

The figure shows that Turkish performance lagged significantly behind emerging and developing economies as a group. In the latter, real GDP rose by 95% compared to Turkey’s 64%.  Real GDP in large emerging markets such as China, India, Bangladesh, and Indonesia all grew more rapidly than Turkey, as it did in many smaller African and Latin American countries.

Turkey’s rank in global GDP tables improved slightly over the decade. In purchasing-power adjusted terms, Turkey went from 17^th to 16^th in global GDP rankings (surpassing Australia).  Measured at current exchange rates, it rose from 21^st to 17^th (surpassing Taiwan, Switzerland, Belgium, Netherlands, Sweden, but falling behind Indonesia). (Note that comparisons of rankings over time using current dollars can be misleading for the same reason noted above, namely movements in real exchange rates.)

Bottom line: Turkey did well relative to advanced countries, and closed the income gap with them. But its performance benchmarked against the most relevant comparators, emerging and developing countries, was not distinguished.

*For Turkish readers, there are good accounts of real-nominal measurement issues by Ege Cansen, Ugur Gurses, and Aykut Kibritcioglu. Also, a technical digression may be useful here. A real appreciation of the curency may reflect an external terms of trade improvement. In that case, it would represent a gain in the purchasing power of domestic output. However, there has not been a trend improvement in Turkey's terms of trade over the 2002-2012 period. Turkish real appreciation has little relation to the changes in its terms of trade, and seems to be driven largely by changes in domestic relative prices (nontradables versus tradables.)

Comments

[Sinaerdal]

as of today, with one USD fetching 1.92 TL, the nominal (or real) Turkish GDP measured in US dollars has shrunk about 7% compared to just 5 weeks ago.

[TC_GlobalOnline]

Turkish economy...

[Mert Kuntsal]

Thanks for the post, it is helpful. However, I would like you to elaborate more on the definition "emerging and developing economies" given in the graph.

1) Who are these economies? How many countries have been taken into account? How were the values averaged? (Because different currencies are used in every country)
2) How was the population change in these countries? How is Turkey's real GDP per capita is doing compared to these countries? (Because Turkey's population hasn't changed much)

With these data, we can much better understand Turkey's position in the global economy. Any further input is appreciated Mr. Rodrik.

[Senermen]

1/ what has been fueling the growth?
2/ is it sustainable?
3/ what does it mean to an avg person on the street?

[Truthseeker]

I am no expert on these matters such as yourself. But I was under the impression that the best indicator of economic growth is based on comparative per person GDP figures in USD, normalized through PPP (purchasing power parity). That is in fact the method used by the IMF, the World Bank and OECD when they publish comparative growth figures for countries. Also, please correct me if I am wrong, but using these figures it can be asserted that the average income per person in Turkey has grown to levels of 2.5-3 times of the 2002 figures. Would you dispute that?

[Saliha Kaya]

Thank you Dani,for this discussion.It's necessary for the people of Turkey to view the facts...

[Cemil Turun]

Dear Prof. Rodrik, could you please elaborate more on your last sentence? What was the main cause of the change in domestic relative prices?

'Turkish real appreciation has little relation to the changes in its terms of trade, and seems to be driven largely by changes in domestic relative prices (nontradables versus tradables.)'

[D]

Truthseeker,

I not an expert on Turkey's economy... However, the 2013 IMF WEO database does provide some data for growth from 2002 to 2012.

GDP growth at constant prices - 62.57%
Per-capita GDP growth an constant prices - 43.3%
PPP GDP growth - 110.5%
Per-capita PPP growth - 85.56%

The PPP numbers are much higher. However, they are stated in terms of current dollars, not constant dollars.

From 2002 to 2012 the GDP deflator for the U.S. rose 25.154%. If you deflate the PPP numbers for Turkey using the U.S. GDP deflator you get numbers very close to the constant national currency (Lira) numbers for Turkey.

[Tufan Kurt]

I did a more extensive research about 24 developing economies(including Turkey) over 18 criteria to compare AKP's rule(2003-11) to previous coalitions period(1993-2002)using Worldbank data. It looks like on 10 of the criteria Coalition (1993-2002) performed better among developing economies vs AKP's 8. You can see details on my facebook page.And just to be clear i started to post it 3 days before this post and it is in Turkish if anyone is interested i ll be willing to help

[Ertan Apaydin]

You should analyze emerging economies exclude China.

[Mattimmy]

Thanks for the post. Would it be possible for you to elaborate on the role legal reforms have played in encouraging foreign investment in Turkey.

http://www.youtube.com/watch?v=ZfEXC2_0_X0&list=PLo4scXA5wDGxJ_LXeEeudT69LXll-24ha&index=56

[D]

there is some countries have a growth in economics

http://busana-pria.com/ulasan-mengenai-jas/jas-pengantin-2

http://www.busana-pria.com

[Xenon39]

China is an exceptional case, a comparison to emerging economies excluding China would make more sense. But still, a mere comparison to other developing economies should not be the only criteria to evaluate AKP's economic performance unless you wanna end up saying previous government has performed better although they have led Turkey into worst financial crisis in decades.

[plus.google.com/113253514944137218462]

thank you sir

Foto Bugil
Foto Ngentot
Foto Cewek Masturbasi Bugil
Foto Puting Susu
Foto Cewek Bugil

[GambarAnimasi]

Thank you Dani,for this discussion.It's necessary for the people of Turkey to view the facts...

Watch Lone Survivor Full Movie
Watch 47 Ronin Full Movie
Watch Grudge Match Full Movie

[GambarAnimasi]

thanks very usefull for me

Unblocked Games
Apple Shooter Unblocked Games
Bubble Shooter Unblocked Games
Happy Wheels Unblocked Games
Gun Blood Unblocked Games

[Ankar Alemi]

Good article bro thanks...
oto kiralama ankara - oto kiralama ankara havalimanı - türkiyem video

[penny]

Useful information shared.I am very happy to read this article.thanks for giving us nice info.Fantastic walk-through. I appreciate this post.Thanks.
Adaptador Ordenador Portátil
cargador Acer
cargador Apple
cargador Asus
cargador Clevo
cargador Dell
cargador HP
cargador LCD
cargador lenovo
cargador LG
cargador Medion
cargador MSI
cargador Packard Bell
cargador Panasonic
cargador Samsung
cargador Sony
cargador Toshiba
cargador Vizio

[AgenBolaKaki]

http://www.mahapoker.com/ Dewa Poker http://www.mahapoker.com/ Permainan Poker http://www.mahapoker.com/support/carabermain.html Cara Bermain Poker http://www.mahapoker.com/ Poker Online http://www.mahapoker.com/ Game Poker http://www.mahapoker.com/ Poker Online Indonesia http://www.mahapoker.com/ Agen Poker http://www.mahapoker.com/ Poker Uang Asli http://www.mahapoker.com/ Agen Poker Online http://ligabebek.com Agen Bola - http://ligabebek.com Agen Bola Terpercaya - http://ligabebek.com Agen Sbobet - http://ligabebek.com Casino sbobet - http://ligabebek.com Sbobet - http://ligabebek.com Bola Tangkas http://tangkaspro.com/ Bola Tangkas http://tangkaspro.com/ Bola Tangkas Terpercaya http://tangkaspro.com/ Bola Tangkas Online http://tangkaspro.com/ Agen Bola Tangkas http://tangkaspro.com/ Bola Tangkas Online Indonesia http://tangkaspro.com/ Tangkas Online http://the-infinitygroup.com/ Poker Dewa http://the-infinitygroup.com/ Texas Holdem Poker http://the-infinitygroup.com/ Games Poker http://the-infinitygroup.com/ Zinga Poker http://the-infinitygroup.com/ Poker Texas Boyaa http://the-infinitygroup.com/ Dewa Poker Online http://the-infinitygroup.com/ Zyngapoker http://the-infinitygroup.com/ Holdem Poker http://the-infinitygroup.com/ poker online terpercaya http://walibola.com Agen Bola Terpercaya http://walibola.com Agen Bola Online http://walibola.com Situs Agen Bola Terpercaya http://walibola.com Agen Bola Tangkas http://walibola.com Agen Bola Sbobet http://walibola.com Sbobet http://walibola.com Ibcbet

[AgenBolaKaki]

Sebuah lurus http://walibola.com/ dengan hanya satu kartu Agen Bola Terpercaya adalah mungkin, tetapi juga Agen Bola Online tangan yang akan Agen Bola Indonesia Anda tertutup, karena Situs Agen Bola Terpercaya Anda memegang Agen Bola Tangkas kartu tertinggi Agen Bola Sbobet  waktu yang sama. Siapapun Ibcbet yang

[AgenBolaKaki]

http://bunglonblog.blogspot.com/2014/05/dewapokercom-poker-online-yang-pertama-indonesia.html

[Klikstor]

really nice sharing
pallet plastik
tabita skin care
sewa mobil box
pulau tidung

[Klikstor]

HARGA DAN SPESIFIKASI HANDPHONE - ANDROID - TABLET

[nanakeren1]

Jual madu manuka asli jakarta indonesia

[sukses]

ya

[sukses]

betul

[sukses]

http://rodrik.typepad.com/dani_rodriks_weblog/2013/06/how-well-did-the-turkish-economy-do-over-the-last-decade.html

[sukses]

http://rodrik.typepad.com/dani_rodriks_weblog/2013/06/how-well-did-the-turkish-economy-do-over-the-last-decade.html

Posted by: sukses |

[sukses]

test

[sukses]

metland rumah idaman investasi masa depan

[Ilk99]

Firstly what is the purpose of this article specifically about Turkey?? (Unless you do it for all other countries,then can you please give us the address or the link of your other country studies so we can refer to them for our comparative learning). By the way, you were writing political articles agains the current government of Turkey, maybe as bitter as a domestic opposition party why is that?? ....can it be due to your personal relation to a Turkish Army ex-General who was being trialled for plotting against the Government (this General is the father of your wife, right?). Anyway, despite your efforts to prove that Turkey's government was not that successful in the last decade, in fact you yourself proved with your worst estimate that 'the real GDP rose by 64%' :) you are contradicting with yourself! What is the conclusion of this article?? 'The Turkish Government did well in the last decade but not perfect'?? [P.s. turkey real GDP 2002: $230bn vs GDP 2013: $820bn]

[TasRanselWanita]

nice info gan

[TasRanselWanita]

kehamilan adalah hal yang ditunggu tunggu, saya suka sekali menunggunya, let's help her
hamil
peter
evie

[sukses]

wow benar - beanr bagus ni cipto junaedy

[Jhonabundance]

cipto juanedy

[Jhonabundance]

this is the best Tempat kursus Website, SEO, Desain Grafis Favorit 2015 di Jakarta and minuman berenergi

[Jhonabundance]

thank you kursus online Belanja di elevenia gratis voucher 1 juta

[Jhon]

good job cipto junaedy

[Jhon]

This is the best cipto junaedy

[Jhon]

i like this cipto junaedy

[Jhon]

Best site i know cipto junaedy

[eri alaspari]

ciri jantung koroner

[eri alaspari]

good ciri jantung koroner

[yulia indarti]

one of fav site konaki

[Sejujurnya]

Great stuff, keep it up!

keajaiban dunia piramida
keajaiban dunia koloseum
keajaiban dunia lubang hitam
keajaiban dunia patung zeus
keajaiban dunia alexandria

[Ankar Alemi]

Güncel ve objektif haber sitesi

[sanny raskiny]

color is the most important part of life, without color humans cannot feel the beauty of the world. even skull images like this are part of the art of color ... art makes people's lives more interesting

bola tangkas
judi tangkas
Agen Tangkas