Ömer KARADENİZ
Plastics Industrialists Federation (PLASFED)
Chairman of the Board
While multivariate crises experienced at a global level affect the world economy, Turkey also gets its share of these difficulties. The country's economy, preparing to leave a challenging year behind, is experiencing instability in its macro balances, especially due to geopolitical uncertainties. Turkey, trying to overcome all these problems with exports, broke the Republic's history record with its performance in October. The share of the plastics sector within the chemical industry, which is our country's second-largest exporting sector, is remarkable.
The year 2024, which we are preparing to leave behind, has been recorded as a challenging year for both the world economy and the Turkish economy. As we enter the last month of 2024, the world is experiencing economic and geopolitical uncertainties, and undoubtedly, our country has also been affected by this process.
The war between Russia and Ukraine, which has been ongoing for two years, continues to affect the entire world, especially Europe. The war between Israel and Hamas in the Middle East stands before us as a major humanitarian catastrophe. The risk of the war spreading in the region is growing every day. Naturally, all these developments are also reflected in our country's macro balances.
The Turkish economy, which closed 2023 with a 4.5 percent growth, closed the first quarter of 2024 with 5.3 percent growth and the second quarter with 2.5 percent growth. The year-end estimated growth is expected to remain at 3.5 percent.
Turkey, which accounts for approximately 1 percent of the world economy, ranks as the 18th largest economy in the world at current prices. In our country, which is the world's 11th largest economy in terms of GDP by purchasing power parity, the per capita national income is at 13,110 dollars. Considering geopolitical balances, we can predict that 2025 will pass with the same parities as 2024.
Plastics have a large share in the increase in exports
Positive developments are observed in our country's exports. There is a significant increase in October exports in particular. Turkey's exports increased by 3.6 percent in October, reaching 23 billion 620 million dollars, breaking the Republic's history record. Last month, consumer goods imports were 5.1 billion dollars, while 12-month consumer goods imports reached a new peak with 52.6 billion dollars. In the same period, intermediate goods imports decreased by 0.2 percent to 20 billion 11 million dollars.
According to data from the Turkish Exporters Assembly (TİM), the automotive sector ranked first among the highest-exporting sectors with 3.5 billion dollars, while the chemical sector became Turkey's second-highest exporting sector by realizing 2.47 billion dollars in exports in October. In the first 10 months of the sector, our exports reached 26 billion dollars with a 2.7 percent increase.
In the chemical products and derivatives product groups, plastics and derivatives exports ranked first with 819 million dollars. In the increase in exports, chemicals, and naturally plastics, had a large share. Mineral fuels and products ranked second with 442 million dollars in exports, while inorganic chemicals exports ranked third with 240 million dollars.
Opening the way for exporters is vital for the strengthening of the Turkish economy. The only way to effectively combat inflation without cooling the economy is through exports. Turkey's exports must always be supported.
Year-end inflation will remain above 40 percent
The monthly CPI published in October exceeded expectations, increasing by 2.88 percent, and annually by 48.58 percent. Although the annual inflation continued to decline due to the base effect, the downward momentum slowed down. The sharp 22.2-point decrease due to the base effect, especially in the July-September period, was effective in the annual inflation decline experienced since May. However, the base effect factor that enabled the decline in inflation weakened as the last quarter began. In October, the decrease in annual inflation due to the base effect was less than 1 point compared to the previous month.
Looking at the last two months, we see that monthly inflation data exceeded expectations. Looking at the data, we can predict that annual inflation will remain above 40 percent. According to the IMF database, Turkey still has the sixth highest inflation in the world. According to the announced data, the year is projected to close with 44 percent inflation.
“We will wait for interest rate cuts”
It can be considered that interest rate cuts, within the scope of fighting inflation, will be postponed to another period. The earliest interest rate cut could be seen in the first quarter of next year. We see that inflation has not materialized in line with the Central Bank's expectations. Although November and December data are not yet clear, we are slightly behind the targeted inflation. Generally, when inflation is projected to reach 45 percent annually, we can say that interest rate cuts will shift to next year. It seems we will have to wait a little longer for interest rates to start falling globally. Among leading economies, only Brazil and the European Union have recently cut policy interest rates. Brazil lowered its policy interest rate by 0.25 percentage points to 10.50 percent in May. The European Central Bank, on the other hand, reduced its interest rate to 4.25 percent with a 0.25 percentage point cut in June. In other major economies, expectations for imminent interest rate cuts are diminishing.
For our country to strengthen economically and thus increase its competitiveness in international markets, producer sectors need to be revitalized and production levels strengthened. By implementing economic and structural reforms, it is possible to increase our country's competitiveness in the global economy. For the Turkish economy to improve, economic problems can be overcome through the combined efforts of both the public and Turkish industrialists.
9-month exports 7.6 billion dollars
Looking at the January-September period of 2024, a total of 7.6 billion dollars in exports was observed. Again, according to the first six months' data of the year, the highest exports were observed through “Other Acrylic Polymers” with a 16 percent share and 205.27 million dollars in exports. Followed by, respectively; “Poly (Ethylene Terephthalate) - with a viscosity of 78 ml/g or more” and “Other Polyesters - Liquid. Unsaturated.” These product groups also account for 20.43 percent of the total exports.
According to countries, a total of 175 countries were exported to in the plastic raw material goods group. The countries with the highest exports are, respectively, the Russian Federation, Italy, Germany, Romania, and Spain.
This content has been translated using artificial intelligence technology.