Turkish Growth: Parsing The Numbers
Emre Deliveli | Jul 23, 2012 12:45PM ET
Not in the sense of Greece or, more recently, China, but some have been noting that a surge in gold imports and exports has been distorting GDP figures:
It's important to note that if imports and exports both rose roughly the same amount in the same quarter, the net effect on growth would be zero. But as you can see in the graph above, that is not the case. As I've noted before, imports jumped first, then went exports. Simply put, we should have imported gold before participating in the unofficial “oil-for-gold” program with Iran. That meant that growth in the last quarter turned out to be less than it would have been without this igneous scheme. How much less? According to Fatih Ozatay, if Turkey had exported USD 1bn less gold in the first quarter, yearly growth would have been 2.6% rather than 3.2%. His analysis is very crude and partial equilibrium, but I think it is accurate enough. After all, if the mechanism I summarized in the previous gold post is true, the import-export scheme is not taking up many economic resources.
In the second quarter, both imports and exports surged, but exports more so, as we will probably see another “inflated” growth figure.
Finally, it' also important to note that we had an import-export surge in 2008-2009 as well. Though not sure why, comments on that would be welcome.
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