In that regard, revised accounts, which now use 1998 as the base year (the previous base year was 1987), represent major improvements in the consistency of the data, enabling international comparability of figures. The new GDP figures are in compliance with the European System of Accounts (ESA-95), a system deemed more comprehensive.According to declared figures, as of 2006, the new GDP figure posted an increase of 31.6 percent, amounting to YTL 758.4 billion, up from YTL 576.3 billion in the previous account. The new series’ data show an average annual growth of 7.5 percent during 2002-2006, compared to 7.1 percent in the previous account set.
Moreover, according to the new formula, income per capita increased by $2,020 in 2006 -- from $5,480 to $7,500 -- a 31.6 percent rise over the previous year. The income per capita figure for 2007 will be released on March 31 and is expected to be around $8,500.
The main factor behind the increase in national income is the growth of the manufacturing industry by more than what had been estimated. In earlier calculations the number of enterprises employing 10 or more employees was forecast to be 11,293 for 2006. But the new calculations produce 27,813.
Another factor responsible for the increase is the housing sector. The earlier calculation cites the number of buildings as 13 million while the new calculation gives 19.2 million. The number of unregistered businesses can be calculated more accurately using the new methods.
After this revision it seems that Turkey’s basic macroeconomic indicators, as shown in the table below, have improved significantly. First of all, the current account deficit declined from 7.6 percent to 5.8 percent of GDP as of 2007 (Q3). Moreover, the ratio of the budget deficit to GDP declined from 2.1 percent to 1.6 in 2007 according to the new method. Another critical macroeconomic fragility indicator, other than the current account and budget deficit, is the ratio of gross public sector debt to that of GDP. It declined from 55.1 percent to almost 42 percent after the data were revised. Finally, Turkey’s total foreign/external debt has also declined to 39.4 percent from almost 52 percent.
All these developments have significantly improved Turkey’s basic fragility indicators and should motivate an improvement in credit ratings. At a time when the global economy is surrounded by heavy uncertainties, these data offer Turkey a chance to turn a shaky situation into an opportunity to better itself.
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