| FROM CHIEF | Murat SARAYLI |
| Chairman of the Board of TUGIAD/Confedereration of Young European Businessmen (YES) |
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SECOND HALF YEAR EXPECTATIONS FOR THE ECONOMY AND OUR PROPOSALS |
The economic circles are closely monitoring the progress of macro-economical indicators and level of interest and rate of exchange in the country. Contrary to the cost inflation which come out considerably high in June, that demand inflation being higher than expected in July can direct Republic of Turkey Central Bank to impose a new rise of interest at the point of 0,25. Moreover; because the USA inflation data has come out better than expected and USA Central Bank make a break in the interest rise in its meeting on August 8, the hope that the interest of global investors to the developing economies will revive gains strength. For this reason, it can be stated that critical macro data such as inflation, foreign trade and current accounts will be closely monitored by the economy world. At this point, it is seen that the growth expectations for the second quarter of the year is optimistic. That the industrial production ends the second quarter of the year with a record level with its record export volume in June points out that an increase in production at the rate of 9.6 % may also contribute to the growth of Gross National Product. For this reason, the expectations for the second half of 2006 are important.
In the light of these developments, we, as TÜGİAD, have completed a report that will enlighten the macro evaluation of the first half of 2006 and expectations for the second half of the year with the contributions of our members. The opinion of our members, which contributed a lot especially to the report within the frame of the survey prepared, has been largely evaluated in the second part of the relevant report. The answers of the survey point out that company activity of half of our members is affected from the latest economic fluctuation. The effect appears as a decrease in the company investments/suspension, decrease in domestic sales; if positive, as an expectation of increase in export. It is also stated that the increase in the rate of exchange has affected the production costs. In fact, half of our members who participated in the survey state that they plan to increase the prices of goods and services they produce in the second half of the year. It is predicted that half of the price increases will be 10 % and below and the other half will be over 10 %.
TÜGİAD members demands that the economical administration give priority to the increase of the support for the production and export following the economic fluctuation. Moreover, nearly 86 % of our members support the continuation of the relations with IMF to recover the economic expectations. Despite the increase in the rate of exchange, that half of our members consider YTL valuable appears as an important data regarding the relation between the competitive power of the companies and value of YTL. Our members demand stability after the economic fluctuation. For this reason, nearly all of our members do not want an early general election in the second half of 2006. They also think that an early general election to be made in the second half of 2006 will have a negative impact on economy. According to the survey data, it is thought that a hard and uncertain period will be experienced in the relations with EU but the relations will not break no matter what happens.
TÜGİAD members predicted that the inflation will be below 10 %, export volume will be 87,8 billion dollar, import volume 123,4 billion dollar and growth rate will be a little lower than 5 %. Our members who have participated in the survey predict that the average dollar estimation for the end of the year will be 1,7750 YTL.
In the last part of the report, we suggest that a “micro programme” is prepared to increase the competitive power of the enterprises as a solution to the problems of non-financial sector and for this purpose, a “Work Council” is constituted in which participants of private sector and economy administration will take place together. We advise that this council, which is offered to work continuously like a Tax Council, first prepares a programme to be implemented in autumn and a programme credit is received from World Bank for this matter. We stress the need that the government support is rearranged for this programme. We also point out the need to generalize the tax in the area of tax and to start a fresh move in the struggle with unregistered economy. In this way, we point out the need to increase the efforts to reduce the heavy public burden of enterprises which are registered for a long time. We advise that the flexibility of manpower market is increased and a healthier balance is formed between the competitive power of enterprises and wage and employment (unemployment) by reminding that conditions of working, business, wage and social security are so tough in the manpower market. I believe that this report, prepared with the considerable contributions of its members, will be evaluated diligently as regards to the business world.
