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

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.


Arabtec Holding said to hire AlixPartners for debt advisory

Updated 25 September 2020

Arabtec Holding said to hire AlixPartners for debt advisory

DUBAI: Dubai-listed contractor Arabtec Holding has hired advisory firm AlixPartners to help it restructure the company’s debt, two sources familiar with the matter said.

AlixPartners is assessing the company’s debt profile, before any potential discussions with Arabtec’s creditors, according to the sources, who declined to be named as the matter is not public.

Arabtec did not respond to a query for comment when contacted on Thursday. AlixPartners declined  to comment.

Arabtec Holding is due to hold a shareholder meeting on Thursday afternoon to decide whether to continue operating or liquidate and dissolve the firm after the pandemic hit projects and led to additional costs.

FASTFACT

 

Arabtec last month posted a first-half loss of 794 million dirhams ($216.18 million).

The company, which last month posted a first-half loss of 794 million dirhams ($216.18 million) and total accumulated losses of 1.46 billion dirhams, said on Sept. 9 that it was calling a general assembly under an article of UAE company law.

The law requires companies to vote on whether they should continue operating if their accumulated losses reach half of their issued share capital.

Shares of Arabtec Holding, which helped to build the Louvre Abu Dhabi and the world’s tallest skyscraper, the Burj Khalifa in Dubai, have plunged 56.7 percent this year. They were down almost 5 percent when a suspension of trading was triggered at 1 p.m. local time ahead of the meeting, which was being held in Abu Dhabi.

Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after an oil price crash hit energy services and construction.

This week, creditors started to enforce claims against Abu Dhabi-based Al Jaber Group, which has struggled since building up debt in the wake of a UAE real estate crisis and began talks with creditors in 2011.

Dubai-listed construction firm Drake & Scull is working under the UAE bankruptcy law to reach an agreement with its creditors in an out-of-court process.