Abdurrahman Kaan, Chairman of the Independent Industrialists' and Businessmen's Association (MÜSİAD), made a written assessment of the first-quarter 2020 growth figures announced by the Turkish Statistical Institute (TÜİK).

In his statement, Kaan noted the following:

The Turkish economy, which performed quite well throughout 2019, a year when contraction was predicted, grew by 0.9 points. It also grew by 4.5% in the first quarter of 2020, successfully surpassing a critical threshold. Considering that during the same period, China contracted by 6.8%, the Eurozone by 3.2%, Germany by 2.3%, Japan by 2.0%, and the UK by 1.6%, while the US grew by 2.3%, South Korea by 1.3%, Russia by 1.6%, and Indonesia by 2.3%, the success of the Turkish economy becomes clearer.

Before the pandemic struck, we targeted 5% growth in 2020, a year in which we will likely leave it as a period of no growth. However, the Turkish economy, which achieved the highest growth rate among G20 countries after India in the first quarter of the year, will regain momentum, particularly in the second half of the year, as the negative effects of the Covid-19 pandemic begin to fade.

In the Turkish economy, which accelerated with a 6.2% expansion in domestic demand in the first quarter of the year, we observe a continued decline in investment. Accordingly, investments, which decreased by 1.4% compared to the same month of the previous year, continued to constrain growth. The 1.0% decrease in exports of goods and services during this period highlighted the role of domestic consumption as a driving force in growth. We anticipate that domestic demand, which tested historic lows, particularly in April and May, due to the Covid-19 pandemic, which caused a serious crisis in both supply and demand in the Turkish economy, as in the global economy as a whole, will begin to increase again in the third quarter.

Another noteworthy point in the growth figures is that the industrial sector, which had seen relatively limited growth of 0.2 points throughout the previous year, expanded by 6.2% in the first quarter of 2020. During this period, the industrial sector gained momentum with a 6.7-point expansion in the manufacturing sector, supported by the agricultural sector with a 3.0% increase and the services sector with a 3.4% increase. We believe that our manufacturing industry, which we believe is the engine of growth, will positively differentiate itself from other countries during the COVID-19 pandemic thanks to our flexible production capacity and proximity to major markets.

The positive impact on the markets of the support and incentives provided by the economic administration, exceeding 260 billion TL, will become even more evident during and after the normalization process, which begins in June. Based on these developments, MÜSİAD predicts that the momentum in the Turkish economy will rapidly return to positive levels in the second half of the year.