Ali Babacan in Wonderland

To tell you the truth, I did not lose any sleep over annual growth in the third quarter, which came in much lower than expected (1.7 versus 2.9 percent) according to official statistics released on Dec. 10.

For one thing, the economists surveyed by business channel CNBC-e seem to be treading carefully with their growth forecasts: They tend to overestimate growth during slowdowns and underestimate it during recoveries. Moreover, these data are outdated. To get a more current picture, we need to look at leading indicators of growth.

It is true that industrial production, which usually tracks growth pretty well, also came in lower than expected (4.4 versus 5.5 percent) according to official statistics released on Dec. 8. But as I explained in my Dec. 5 column, more recent data are hinting at a slight pick-up in growth in the last quarter and next year.

Moreover, even though Governor Erdem Başçı indicated otherwise during his presentation of the monetary and exchange rate policy for 2015 on Dec. 10, I believe the Central Bank, under pressure from President Recep Tayyip Erdoğan to lower rates, will yield once inflation plunges thanks to base-year effects – provided there isn’t too much pressure on the Turkish Lira.

I am actually worried about growth, but for different reasons. For one thing, the economic rebalancing underlined by economy tsar Ali Babacan in his short press release on the growth figures seems to have come to a halt. Leading indicators hint that consumption is picking up and exports are stalling, and so growth will be dependent on external financing next year as well.

Prospects for longer-term growth are even more worrying: Babacan, following on Başçı’s lead, blamed the...