Germany’s exports spread hopes for Turkish businesses

ISTANBUL – Daily News with wires

The strong growth in the first quarter of 2011 posted on Friday in European Union engine economies may serve the interests of Turkey’s long-term trade targets, according to Turkish business representatives and economists.

European economies posted solid first-quarter growth rates on Friday, with several showing strong demand at home, except Italy where growth barely scraped into the black.

Germany, with the biggest European economy, led the way, expanding by a quarterly 1.5 percent to a level last seen before the economic crisis in 2008, provisional data showed.

Germany remains the biggest export market of Turkey.

France added 1.0 percent, the strongest rate since the second quarter of 2006, and Spain turned in a gain of 0.3 percent as it picked up speed from the end of 2010.

“We are pleased to see the growth rates at the end of first quarter in Germany and France better than expected,” Rona Yırcalı, the board chairman of Foreign Economic Relations Board, or DEİK, told the Hürriyet Daily News on Friday.

Despite the anxiety about the bailout operations to economically struggling economies, especially German and French economies show signs of a recovery, according to Yırcalı. Noting that both Germany and France are major trade partners for Turkey, “We will exceed this year’s total export target of $135 billion,” she said.

“Being the locomotive countries of Europe, Germany and France stimulate positive expectations for the long-awaited European recovery,” said Rıza Nur Meral, president of Confederation of Businessmen and Industrialists of Turkey, or TUSKON. “The recent growth in the first quarter will show its positive effect on Turkey’s export figures as well,” said Meral.

“Especially Germany’s growth is a positive sign for the Turkish economy,” said Nurhan Toğuç, the chief economist of Ata Invest said in a phone interview Friday, noting that increasing value of euro would serve the benefit of Turkish exporters.

She also noted that Turkey’s growth model might have more of a chance of sustainability than the German one. “I question whether Germany can continue its growth model based on exports,” said Toğuç.

“Germany still struggles to sustain its export volume to European markets and is likely to face serious obstacles with the U.S. market due to the euro’s considerable gain in value against dollar.”

The bottom

Recalling Turkey’s export target of $500 billion by the year 2023, the 100th anniversary of the modern republic, Toğuç said the country could achieve a similar growth model with Germany, a kind based on increasing exports. “Turkey has experienced the maximum levels of current account deficit so far,” she said, adding that the current account deficit trend might change route to the positive.

“Turkey’s growth model is based on domestic consumption as Germany’s growth is mainly relying on foreign demand,” Finansbank chief economist İnan Demir,

“Turkey has to adapt the German model of growth in order to increase its competitiveness in the long run,” he said.

* Gökhan Kurtaran from Istanbul contributed to this report

via Germany’s exports spread hopes for Turkish businesses – Hurriyet Daily News and Economic Review.