We have talked about 'developed countries and others', or 'different economy policies against the crisis', and now it are time to talk about Turkey. Today, I would like to assess the latest developments. First, I will say a few words about the industrial production index announced this week.

Production reducing impact of the global crisis first appeared in August 2008. For that month, production index implied 3.5% lower production compared to same month in 2007. Production in August 2009 was also lower than that in August 2008 by a similar rate. Fall in production was 6.3 percent. To put it differently, we are producing less compared to two years before, let alone last year. Such are crises... Most people perceive the crisis as 'the jump in exchange rate and interest rate'. However, what matter is the leap in unemployment rate and fall in production. Exchange rate and interest rate leaps were observed during the Iraqi war at the beginning of 2003, spring 2004 and in mid-2006. Many people though a crisis has emerged; counter-measures were discussed with panic. However, that phenomenon disappeared soon and affected neither unemployment nor production. Rather, rises in national income remained high and unemployment did not increase. And now look at the point we stand at: industrial sector produced 10 percent less compared to two years before.

We know that one of the important reasons of the fall in production is the fall in exports. The mentioned fall was unfortunately significant also in September. To assess the reflections of the condition of exports on production, export figures must be examined net off the volatilities in Dollar -Euro parity and changes in export prices. However, changes in exports in Dollar terms also give valuable opinion.

According to TİM (Assembly of Turkish Exporters) data, in September exports in Dollar terms decreased by 30.6 percent compared to same month last year. By quarters, exports decreased by 33 percent in the first quarter, by 35.9 percent in the second quarter and 29.1 percent in the third quarter. The point made for industrial production is valid also for exports; exports fall even when compared to 2007.

October export figure will be particularly important, because it was in October 2008 when we first encountered the phenomenon that exports are lower compared to the year before. In the following months, the pace of the fall further increased. It would be quite unpleasant if the fall in exports continues.

First indications about October are positive. Export figures for the first eight days are given in Undersecretariat of International Trade website. Accordingly, exports were 133 percent higher than the same period last year. When assessing this figure, it is necessary to note that second and third day of the Ramadan holiday were in October. I hope that figures will indicate a rise in exports as well when assessment is made net of holiday affect. Prevailing of this phenomenon in the rest of the month as well as in following months will be quite favorable for the industrial sector. In that sense, pace of recovery in EU economies in particular gains importance.

This commentary was published in Radikal daily on 11.10.2009