Turkish Economy Breaks Historic Record

For the first time, GNP has reached $301.5 billion. Per capita income was recorded as $4,172, equivalent to $7,736 according to the purchasing power parity in 2004. State Minister for the Economy Ali Babacan announced on Thursday, March 31 that the figures represent the highest rates of growth since 1966 and the national income per capita is a record in the history of the Republic. Turkey’s economy grew by 12 percent in 1966. The Justice and Development Party (AKP) government revised the year-end growth target for 2004, designated as five percent at the beginning of the year, to 10 percent.

As for the business world, growth rates announced by the State Institute of Statistics have also boosted morale. Honorary President of Koc Holding, Rahmi Koc expressed that the International Monetary Fund (IMF)-supported stability program implemented by the government has started to bear fruit: "It has built our morale. As long as the stability continues, we can put our signature under many further successes." Union of Turkish Chambers and Commodities Exchanges (TOBB) Chairman Rifat Hisarciklioglu, meanwhile, noted that the growth is not a remedy for unemployment and the employment problem might be solved only by decreasing the burden on sectors such as agriculture and construction. While the president of the Ankara Chamber of Industry Zafer Caglayan evaluated the growth figures as "affirmative development", Professor Esfender Korkmaz attributed the success to the decrease in the exchange rates. Professor Sudi Apak on the other hand, thinks that the growth has not yet reached a stable platform.

Underlining that the growth is wholly provided by the private sector, State Minister Babacan said, "The public sector’s contribution to the growth, either in the form of expenditures or investments, is at a quite low level. This growth is neither derived from a monetary enlargement nor is based on budget deficits. This growth is a very healthy and sustainable one that has been achieved by the pioneering of the private sector." According to this, the private sector had a total investment of 60 billion, 664 million New Turkish Lira (YTL) last year. 41 billion of this amount, representing a 45 percent real increase compared to 2003, was composed of investment in machines and equipment while 19.8 billion was for investments in buildings and construction.