Perfect storm brewing on top of economic headwinds

This week?s domestic data released extinguished hopes that the economy was on a recovery path, while other developments once again highlighted global economic risks that could affect Turkey.

Many analysts concentrated on trade statistics, which were, in my opinion, the least negative figures in a dismal data week. For one thing, part of the annual 18.8 percent fall in exports in May is due to the euro-dollar exchange rate. Turkey?s exports to Europe in euros have actually risen slightly since the beginning of the year.

Similarly, the fall in imports is because of low oil prices, as well as the slowdown in the economy. In fact, in volume terms, neither imports nor exports have contracted significantly since the beginning of the year.

However, annual exports to Iraq and Russia fell 37.2 and 40.1 percent, respectively, in May. Economic problems in the latter are likely to result in a disappointing tourism season: Even with the 26.4 percent rise in Germans, the total number of tourists visiting Turkey fell 2.5 percent on the back of the 27.9 percent fall in Russians.

Interestingly, the number of Britons visiting Turkey fell 4.8 percent. Most hotels in Marmaris, where I am writing this column, have lower occupancy rates compared to last year. Neighboring Turunç looked like a ghost town last Sunday [June 28].

Tour operators told me Brits are flocking to Greece, where hotels have slashed prices. Combined with a weak euro, Greece is now probably looks attractive. Turkey will probably end up stealing some tourists from Tunisia after the deadly terrorist attack there, and hotels are aggressively pursuing new markets such as Iran but I doubt this will be enough.

Other economic data released during the...