Ömer KARADENİZ
Plastics Industrialists Federation (PLASFED)
Chairman of the Board
While multivariate crises experienced at a global level are affecting the world economy, Turkey is also getting its share of these challenges. The country's economy, preparing to leave behind a difficult year, is experiencing instability in its macro balances, especially due to geopolitical uncertainties. Turkey, which is trying to overcome all these difficulties with exports, broke the record in the history of the Republic with its performance, especially in October. The share of the plastics sector within the chemical sector, 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 entered the last month of 2024, while the world was experiencing economic and geopolitical uncertainties, our country undoubtedly got its share of 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 great humanitarian disaster. The risk of the war spreading in the region is growing every day. Of course, all these developments are also reflected in our country's macro balances.
The Turkish economy, which closed 2023 with a growth of 4.5 percent, closed the first quarter of 2024 with 5.3 percent growth and the second quarter with 2.5 percent growth. The estimated year-end growth is expected to remain at 3.5 percent.
Turkey, which holds 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 11th largest economy in the world in terms of GDP ranking by purchasing power parity, the per capita national income is at the level of 13,110 dollars. Considering geopolitical balances, we can foresee that 2025 will pass with the same parities as 2024.
PLASTICS HAVE A SIGNIFICANT SHARE IN THE INCREASE IN EXPORTS
Positive developments are noteworthy in our country's exports. There is a significant increase especially in October exports. Turkey's exports in October increased by 3.6 percent, breaking the record in the history of the Republic with 23 billion 620 million dollars. 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), among the sectors with the highest exports, automotive ranked first with 3.5 billion dollars, while the chemical sector became Turkey's second-largest 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 substances and products groups, plastics and their products exports ranked first with 819 million dollars. Chemistry, and naturally plastics, had a large share in the increase in exports. Mineral fuels and products were in second place with 442 million dollars in exports, while inorganic chemical exports ranked third with 240 million dollars.
Opening the way for exporters is vital for strengthening the Turkish economy. The only way to effectively combat inflation without cooling down the economy is through exports. Turkish 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 monthly and 48.58 percent annually. While the annual inflation continued to decline due to the base effect, the downward momentum slowed. The sharp decrease of 22.2 points due to the base effect, especially in the July-September period, was effective in the annual inflation decline since May. However, the base effect factor that provided the decrease 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 the 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 expected to close with 44 percent inflation.
“WE WILL WAIT FOR INTEREST RATE REDUCTIONS”
It can be thought that interest rate reductions within the scope of combating inflation will be postponed to another period. The earliest interest rate reduction could be seen in the first quarter of next year. We see that inflation is not experienced in line with the Central Bank's expectations. Although November and December data are not yet clear, we are falling slightly behind the targeted inflation. Generally, when inflation is predicted to reach 45 percent annually, we can say that interest rate reductions will shift to next year. It seems we will have to wait a little longer for global interest rates to start falling. Among leading economies, only Brazil and the European Union have recently lowered their policy rates. Brazil cut its policy rate by 0.25 points to 10.50 percent in May. The European Central Bank, on the other hand, reduced the interest rate to 4.25 percent with a 0.25 point cut in June. Expectations for imminent interest rate cuts in other major economies are diminishing.
For our country to strengthen economically and thus increase its competitiveness in international markets, producer sectors need to be revitalized and the level of production strengthened. By implementing economic and structural reforms, it is possible to increase our country's competitiveness in the global economy. Economic problems can be overcome with the joint efforts of both the public and Turkish industrialists for the Turkish economy to improve.
9-MONTH EXPORTS 7.6 BILLION DOLLARS
When we look at the January-September period of 2024, a total of 7.6 billion dollars in exports is observed. Again, according to the data for the first six months of the year, the highest exports were made through "Other Acrylic Polymers" with a 16 percent share and 205.27 million dollars in exports. This is followed respectively by; "Poly (Ethylene Terephthalate) - with a viscosity of 78 ml/g or more" and "Other Polyesters - Liquid. Unsaturated". These product groups account for 20.43 percent of the total exports.
According to countries, a total of 175 countries are observed to have received exports in the plastic raw material goods group. The countries with the highest exports are Russia, Italy, Germany, Romania, and Spain, respectively.
This content has been translated using artificial intelligence technology.