We can say there is a consensus among economists that in 2010 Turkey's economy will grow at a rate close to long term average growth rate. This will to a large extent be achieved due to the marked recovery of exports compared to 2009, which was a quite unfavorable year in this regard. Positive developments in export performance heard in recent weeks confirm this dimension of the growth scenario. However, the scenario did not maintain an evident recovery in private consumption and private sector investment spending. If these two important components of national income enjoy a recovery before the foreseen period and at a stronger fashion as estimated in the basis scenario, 2010 growth rate can pass beyond the estimates. But is this a possibility given the current indicators?
A new step has recently been taken to provide a healthy answer for this question. On Thursday TEPAV and European Commission Directorate General of Economic and Financial Affairs announced the results of a joint survey. This is a new survey for the retail sector. The same survey is also conducted in EU member countries and out of the results an index is established. It is useful to get information on the changes in consumption expenditures from two different channels. The first channel refers to asking questions to consumers directly through surveys and learning their planned spending for the current period as well as in the future. The second channel refers to surveying retailers who sell directly to consumers. This way, you can get information on current consumption expenditures as well as expenditures planned for the future.
In Turkey, other surveys geared to the retail sector are also carried out. However, TEPAV's retail index (TRI) is different than the existing indexes in certain aspects. First, its scope is wider. It covers Turkey as a whole in its sample rather than include retail sellers only in big malls. Second, it contains all retail sectors. Third, apart from the questions pertaining to the past or the present, the survey includes questions related with future plans. Fourth, as also said above, this survey is carried out in EU member countries, too, which makes it easier to make a comparison.
Surveys which this retail confidence index is based on are carried out each month through face-to-face meeting. First set of interviews were made in May 2008. Therefore, we have twenty set of observations. Results of the surveys implemented so far can be retrieved in TEPAV website. Results will be accessible on TEPAV website on last day of each month.
You expect that retail expenditures are subject to seasonality effects at a high degree. Thus it is not possible to make 'in depth' economic analysis out of twenty observations. This is exactly why the survey results were not announced until today. In the coming months it will be possible to make healthier assessment based on TRI.
However, for now, we can underline two important points: Though the index revealed moderate recovery over the last couple of months, retailers' confidence in December 2009, when the last interviews were made, is still in the negative zone; i.e. a 'deep' lack of confidence still prevails in the sector. This is not inconsistent with the basis growth scenario mentioned at the beginning: in 2010, recovery will be based on external conditions. Let us hope that developed countries will not rush in tightening currently loose fiscal and monetary policies.
This commentary was published in Radikal daily on 18.01.2010
