Turkey enters election year with 'zero' growth

The Justice and Development Party (AKP) government, which targeted 4 percent growth in its program for the 2015, has not had a very positive start. Estimates show that the first quarter?s growth rate did not exceed the growth rate of the first quarter of 2014 - in other words there has been a ?zero growth.? 

In a note prepared by Bahçe?ehir University?s Center for Economic and Social Research (Betam), it was stated that ?There was no growth in the first quarter compared to the previous year,? and overall growth for 2015 is estimated at 0 percent. The Central Bank has also implicitly agreed with this outlook. 

?Zero growth,? especially in an election year, for an administration that has a growth target of 4 percent, is no small matter. Despite all the support from public expenditure, the government is not able to enter the June 7 election period amid a lively economic conjuncture. In particular, the global economic outlook does not allow the government to show a lively, vivid, satisfactory economic picture to the voter before the election. 

The first quarter of the year was like this; but will it change in the second quarter? We will have to wait and see whether the budget channels will be opened and populist economic policies implemented by the government, despite the likely deficits. For subsequent quarters this year, however, there are currently no positive signals related to growth.

Betam forecasts this for the rest of the year: ?We do not expect a significant recovery in domestic demand in 2015. If European Central Bank policies are influential on European demand, then a limited recovery in foreign demand may be observed toward the end of the year. However, generally we foresee that in 2015 growth will remain quite weak.? 
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