VKF_FRAE_2018_uyg11

30 Section I: Introduction Turkey’s economy posted moderate growth in 2018. Having ranked high among G-20 countries with a 7.4% growth rate in 2017, Turkey’s economy recorded moderate growth came at 4.7% in the first nine months of 2018. After expanding 7.2% in first quarter and 5.3% in second quarter, the Turkish economy slowed in third quarter to grow 1.6% due to the jump in interest rates. Despite the slowdown in third quarter, the spike in the foreign exchange rate boosted export revenues, which made a larger contribution to economic growth. This positive impact is expected to continue in fourth quarter. With the measures announced by the government, Turkey’s economy is forecast to stabilize in fourth quarter. Due to a lower pace of expansion in fourth quarter compared to the previous one, the economy is projected to record 3.8% overall growth in 2018. The budget deficit widened in 2018. Turkey’s budget deficit, which stood at TL 47.8 billion in 2017, expanded 52% in 2018 to TL 72.6 billion. Meanwhile, the primary surplus, which was TL 8.9 billion in 2017, fell by 85% to TL 1.3 billion. In 2018, budget revenues was up by 20.2% year-on-year to TL 757.8 billion while budget expenditures increased 22.4% to TL 830.5 billion. During the year, the government announced various incentives to support the economy, boost employment and stimulate domestic demand. Minimum wage support for employers continued through the first nine months of the year. In April 2018, tax exemptions were offered to some investors via a project-based incentive system. In May 2018, a ceiling was placed on the Special Consumption Tax on fuel. Other measures implemented during the year included the restructuring of tax and fine related debts, zoning amnesty, and bonuses for pensioners. The social security contribution support were provided to Private sector employers. In the last two Turkish Economy In the first nine months of 2018, the Turkish economy posted moderate growth came at 4.7%. Moderate growth initiated by the government’s stimulative measures 4.7% Economic Growth in the First Nine Months of 2018 THE WORLD AND TURKEY IN 2018 Source: Turkish Statistical Institute Growth Rate (y-y, %) 13 9 11 7 1 3 5 0 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2010 Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Q3 2018 Q3 1.6