TEPAV stated that though large firms started to recover from the 2008 crisis, they remained cautious in terms of investment behaviors.

---

ANKARA - TEPAV stated that though large firms affected adversely by the 20008 crisis started to recover, they remained cautious particularly in terms of investments.

Policy note "From the 2008 Crisis to Today: Large Firms are Still Cautious" by TEPAV Economic Studies is published. Maintaining that the 2008 global crisis had a profound effect on corporate sector in Turkey and caused a significant contraction in the balance sheets of firms, the note said: "As of the last quarter of 2009, the said contraction started to be replaced by recovery. However, debates go on in both world markets and in Turkey that the mentioned recovery is not reflected in investment and that firms are still cautious since they are yet unable to foresee the future."

The note stated:

"In the light of the analysis, it is possible to conclude that along with the second quarter of 2008 relatively large firms witnessed the negative effects of the crisis in terms of the falls in profitability and sales revenues, faced drops in working capitals and accumulated inventories at the first instance. With the second half of 2009, firms tended to deplete inventories and raised sales entering a phase of recovery.

Though the recovery has begun for large firms, import of investment goods and private investments still remain low, firms stay liquid and drop their financial debts backing the argument that firms refrain from making new investments and see an uncertain blurry future. Even though firms' holding large amounts of liquidity can be assessed as an opportunity for the next period, the prolongation of this process could prove harmful for the economy.

When evaluating these results indicating the recovery and caution of the firms, it should also be kept in mind that this reflects only one side of the coin, namely the conditions for large firms. Therefore, it is of critical importance to analyze the impacts of the crisis on small firms.

Large firms which remain cautious as well as relatively small firms which are expected to be affected more deeply and adversely by the crisis need the removal of uncertainties."