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Turkey entered 1999 in an environment where the negative effects of
the Far East Asian crisis lingered, crisis in Russia, our key trade partner,
deepened and a possibility loomed for the global crisis to spread.
After the Russian crisis, interest rates bumped up. Additionally, the
ambiguity sparked off by the decision of early elections led to a
tendency of contraction in domestic demand and production in the last
quarter of 1998.
This tendency was sharpened in the first quarter of 1999,
but noticeably wavered in the second quarter. As a consequence
of the earthquake disasters experienced after this period,
the contraction trend in the economy accelerated in the second half of 1999.
In 1999, Net Foreign Purchase Factor Incomes diminished by 56.2% and so
throughout the year GNP took a real dive of 6.4%.
In 1999, production fell in the industrial sector, affected by the 7.8%
reduction in private sector industrial production and the mere 0.8% change
in the public sector industrial production.
The downward trend in exports starting in the last quarter of 1998
hung over the first three quarters of 1999. The contraction in domestic
production in 1999, piling fiscal costs and the sluggish growth in our
export markets marred our export performance.
In 1999, compared to the previous year, manufacturing industry exports
dipped by 0.5%, exports of agriculture and forestry products by 11.3%,
whereas exports of mining and stone quarry products went up by 5.9%.
The downhill trend in imports which began in the third quarter of 1998
deepened in the first quarter of 1999 and the contraction in imports reached 29%.
In the second quarter of the year, by virtue of the relative recovery in industrial
production and in domestic demand, the slowdown in imports rested at 13.6%.
The earthquake disaster hit imports and in the third quarter,
imports fell by 9.9%. In the last quarter, thanks to the recovery in the
last two months imports towered by 7.3%. At the end, in 1999, exports were
1.4% less than the exports of the same period in 1998 at $26.6 billion,
and imports were 11.4% lower at the level of $40.7 billion.
In this way, foreign trade deficit in 1999 (Export(FOB)-Import(CIF))
was reduced by 25.6% and became $14.1 billion.
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