Economy 32 % bigger with revised calculations
Posted by meb at March 10th, 2008
Turkey’s economy is about 32 percent larger than previously estimated after the Turkish Statistical Institute (TÜİK) changed the way it measures the Gross Domestic Product (GDP) to include more unregistered activity, reported Bloomberg.
Calculated with the new measurement system, the GDP in 2006 was YTL 758.3 billion ($608.9 billion), instead of YTL 576 billion, TÜİK Chairman Ömer Demir told a press conference Saturday on the major revision of the country’s national accounts system. That suggests that the output of 2007 is around $645.5 billion, up from the $489 billion estimate Prime Minister Recep Tayyip Erdogan gave on Jan. 10. TÜİK will announce the full-year GDP on March 31.
TÜİK revised the country’s 2006 per capita income up to around $7,500 from $5,480, reported the daily Hürriyet, citing Demir. The growth rate for the nine months of 2007 in fixed rate was revised to 5 percent, according to TÜİK’s new national income calculation. According to the new calculations, the number of companies employing 10 people or more rose to 27,813 from a previous 11,293. The number of homes was revised and reaches 19.2 million instead of 13.9 million.
The revised national accounts represent major improvements in methodology, coverage, consistency and international comparability of Turkey’s macro-economic statistics, announced TÜİK on its Web site. The main reason of the revision is the extension of the coverage and improvement of the methodology. The new GDP estimates have been compiled according to European System of Accounts (ESA-95), which is a comprehensive and integrated set of accounts. GDP series with 1998 as a base year increased by 31.6 percent in current prices for the year 2006 compared to GDP series with 1987 as a base year. The revised data for 2007 will be announced on March 31.
Expansion in scope:
“The basic body of the change in the revision of national income figures derives from the expansion in scope,” reported Anatolia news agency citing Demir. Formerly, national income calculation was based on the System of National Accounts (SNA 68), he said. With the revision, the series have been compiled within the framework of harmonization with the European Union in statistics. The new calculation methods bring Turkey in line with EU data standards. The revised figures, combined with better measurements of the size of the financial-services and manufacturing industries, provide a more accurate picture of the EU membership candidate’s economy, reported Bloomberg citing Demir.
The increase in the GDP figures will make the nation’s current-account deficit and debt decline as a proportion of the overall economy, reported Bloomberg. That could help Turkey win a credit-rating upgrade. It will also bring the government closer to its goal of raising income per person to $10,000 by 2013 from about $6,900 last year.
“Under normal conditions this would have been quite a positive thing,” said Yarkin Cebeci, an economist for JPMorgan Chase & Co. in Istanbul. “But with the current environment of global risk aversion I do not think we will see any significant market reaction.”
A higher GDP figure on its own will not be enough to prompt a credit-rating upgrade this year, Moody’s Investors Service analyst Kristen Lindow said Jan. 9. Moody’s would first change Turkey’s outlook to “positive” from “stable” while it tracks the consequences of the changes before a possible upgrade in 2009 “at the earliest,” she said.
Turkey’s foreign debt is rated Ba3 by Moody’s and BB- by Standard & Poor’s, three levels below investment grade.
source: Turkish Daily News
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