Turkey’s economy tumbles into first recession since 2009 as polls loom

Two consecutive quarter-on-quarter contractions in economic output is widely considered to be the definition of a recession. (File/AFP)
Updated 11 March 2019
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Turkey’s economy tumbles into first recession since 2009 as polls loom

  • Economic output contracted by 2.4 percent in the final three months of the year
  • Two consecutive quarter-on-quarter contractions in economic output is widely considered to be the definition of a recession

ANKARA: Turkey’s economy entered its first recession in a decade, official data showed on Monday, just weeks before President Recep Tayyip Erdogan’s government faces local elections where growth and inflation will be key issues for voters.
Economic output contracted by 2.4 percent in the final three months of the year compared to the third quarter on a seasonally and calendar-adjusted basis, the Turkish Statistics Institute (TUIK) said.
That followed a drop in the third quarter as well. Two consecutive quarter-on-quarter contractions in economic output is widely considered to be the definition of a recession.
The economy shrank by 3 percent in the fourth quarter of 2018 compared with the same period in the previous year.
Growth came in at 2.6 percent for 2018 overall, but that was still much lower than the 7.4 percent recorded in 2017, a turbulent period following the 2016 failed coup and terror attacks.
The flagging economy coupled with a currency crisis last year are sensitive issues for Erdogan and his ruling Justice and Development Party (AKP) before the vote on March 31. The Turkish leader has often boasted of the country’s strong growth during his time in power.
Inflation has also remained high. It struck a 15-year peak in October at 25.24 percent before falling below 20 percent in February, with food prices hit particularly hard.
The last time Turkey entered a recession was in 2009 after the global economic crisis hit foreign and domestic demand.


Ghosn sues Nissan and Mitsubishi for breach of contract: report

Updated 16 min 24 sec ago
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Ghosn sues Nissan and Mitsubishi for breach of contract: report

  • Ghosn is seeking up to $16.8 millions in damages
  • He spent over 100 days jailed in Japan over financial misconduct trials
PARIS: Former auto titan Carlos Ghosn, currently under house arrest in Tokyo, is suing Nissan and Mitsubishi in a Dutch court for “improper termination” of his contract, French newspaper Le Figaro reported Wednesday.
Ghosn is accusing the Japanese manufacturers of breaching his contract as an employee of NMBV, their joint subsidiary based in the Netherlands, and seeking up to $16.8 million in damages, it said.
The big-spending former chief of both Renault and its Japanese partner Nissan is awaiting trial in Japan on charges of financial misconduct.
He was kept behind bars for over 100 days before being granted bail and sacked from all his management roles.
Ghosn is accused of under-reporting millions of dollars in income at Nissan and of using company funds for personal expenses — charges he denies.
His lawyers argue that while Ghosn resigned from Renault-Nissan BV (RNBV), he had not done so from NMBV and “the breach of contract” was unwarranted, Le Figaro said.
Nissan and Mitsubishi argue that Ghosn’s contract was invalid as it would not have been submitted to NMBV’s board, according to the daily.
NMBV had thanked Ghosn after a meeting of his board of directors on March 12, the same day as the announcement of its dissolution.
Ghosn’s spokesperson and his lawyer both declined to comment when contacted by AFP.
Le Figaro said the manufacturers were seeking to recover some $8.79 million paid to Ghosn by NMBV between April and November 2018.
Renault announced in early June it was considering taking action against its former boss after it identified $12.36 million of “questionable expenses” linked to Ghosn at RNBV.
The 65-year-old Ghosn was arrested in Japan in November as he stepped off his private jet at Tokyo airport.
His dramatic downfall stunned the business world and laid bare tensions in the alliance between Renault, Nissan and their smaller Japanese partner Mitsubishi.
Ghosn has not been charged in connection with his activities at NMBV.