First, Mr. Simsek goes to Washington. One of the things that kept me scratching my head after the IMF Turkey forecasts were released (but forgot to put into my blog entry yesterday) was what the Fund's forecasts would mean for the stand-by. News headlines saying that more expenditure cuts were on the way began to appear soon enough. At this point, it is anyone's guess, but I think the government's primary budget figures would have to revised, for the reasons I outlined in my Monday Hurriyet column.
Second, the dismal tourist arrival figures continue. Of course, the 7.5% yoy March fall is not as drastic as in Greece, but the growing pace of the decline hints that the weak lira will not shield Turkish tourism that much this year. On a more general point, I think economic columnists and market economists alike are giving too much emphasis to price effects and too little to income effects when they discuss Turkish trade. On layman's terms, will it matter if your goods are cheaper if there is noone left to buy your goods? Coming back to tourism, Germany and Russia, two countries that look really dismal in yesterday's IMF forecasts, are also two of Turkey's biggest tourism markets. Given that these countries are headed for a heavy slowdown in the second and third quarters, the summer months, when most of Turkey's tourism revenues arrive, may not be rosy at all.
Last but not the least, we have a businessman who lashes out against the IMF. This is all nice talk, but unfortunately does not reflect the reality at all. The is a huge literature on the impact of IMF programs does not validify the bold claims. In fact, I had summarized the literature in a simple table as part of a paper I coauthored on the IMF some years ago:
BTW, the paper has is a sort of an IMF-101, in case you are interested. And according to my coauthor, the IMF had liked it- I am not sure this is a success or failure, but anyway...
Second, the dismal tourist arrival figures continue. Of course, the 7.5% yoy March fall is not as drastic as in Greece, but the growing pace of the decline hints that the weak lira will not shield Turkish tourism that much this year. On a more general point, I think economic columnists and market economists alike are giving too much emphasis to price effects and too little to income effects when they discuss Turkish trade. On layman's terms, will it matter if your goods are cheaper if there is noone left to buy your goods? Coming back to tourism, Germany and Russia, two countries that look really dismal in yesterday's IMF forecasts, are also two of Turkey's biggest tourism markets. Given that these countries are headed for a heavy slowdown in the second and third quarters, the summer months, when most of Turkey's tourism revenues arrive, may not be rosy at all.
Last but not the least, we have a businessman who lashes out against the IMF. This is all nice talk, but unfortunately does not reflect the reality at all. The is a huge literature on the impact of IMF programs does not validify the bold claims. In fact, I had summarized the literature in a simple table as part of a paper I coauthored on the IMF some years ago:
BTW, the paper has is a sort of an IMF-101, in case you are interested. And according to my coauthor, the IMF had liked it- I am not sure this is a success or failure, but anyway...
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