IMF gathers its Turkish posse: I guess my blogs and weekly columns reeking of skepticism on an easy IMF deal do not look that crazy anymore. As I mentioned before, Erdal Saglam, the original source of the article, has ears longer than Suna's (ignore if you don't speak Turkish), so I would take this very seriously. There is but one thing I have sort of miscalculated: The rise of the mumbles of discontent. I am not keeping an official tab, but there were just today a two columns devoted to the uncertainties surrounding the IMF deal.
Tourism revenues down 11.2% yoy: See my comments on price versus income effects last week. One particular mistake in today's article: There is no way the swine flu has figured in these numbers, as they refer to the first quarter, whereas the flu is much more recent. An interesting question, however, is how the flu would affect Turkish tourism, especially as we are steps away from the summer months when most of the country's tourism revenues materializes. There are two effects to consider: If the flu becomes a global threat, everyone will travel less for leisure, the sort of income effect. But if Turkey does not get hit, there is some chance that it could steal away some tourists from flu destinations, the sort of substitution effect. Of course, this all depends on how the flu will spread globally and also to what extent Turkey will get it, but my gut feeling is that the income effect will outstrip the substitution effect easily, so I do not buy the comments that the swine flu could be a boon for Turkey.
Tourism revenues down 11.2% yoy: See my comments on price versus income effects last week. One particular mistake in today's article: There is no way the swine flu has figured in these numbers, as they refer to the first quarter, whereas the flu is much more recent. An interesting question, however, is how the flu would affect Turkish tourism, especially as we are steps away from the summer months when most of the country's tourism revenues materializes. There are two effects to consider: If the flu becomes a global threat, everyone will travel less for leisure, the sort of income effect. But if Turkey does not get hit, there is some chance that it could steal away some tourists from flu destinations, the sort of substitution effect. Of course, this all depends on how the flu will spread globally and also to what extent Turkey will get it, but my gut feeling is that the income effect will outstrip the substitution effect easily, so I do not buy the comments that the swine flu could be a boon for Turkey.
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