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.


UAE central bank further eases liquidity measures for lenders

Updated 09 August 2020

UAE central bank further eases liquidity measures for lenders

DUBAI: UAE monetary authorities further eased liquidity measures for the country’s banks, enabling them to free up more cash to lend to companies and individuals affected by the coronavirus pandemic.

The UAE government in March launched the $69.707 billion Targeted Economic Support Scheme (TESS), which includes $13.615 billion provided by the central bank via collateralized loans at zero cost to all banks operating in the country.

Monetary authorities are “reviewing the existing thresholds of two prudential ratios: the Net Stable Funding Ratio (NSFR) and the Advances to Stable Resources Ratio (ASRR) by temporarily relaxing the requirements for the structural liquidity position of banks,” a statement from the UAE Central Bank said, as reported by state news agency WAM.

“This step comes as an additional measure encouraging banks to strengthen the implementation of the TESS and support their impacted customers in overcoming the repercussions of COVID-19 pandemic, the statement added.

For the NSFR, mandatory for the five largest UAE banks, lenders were allowed to go below the 100 percent threshold, but not lower than 90 percent, while ASRRs could go beyond 100 percent but not higher than 110 percent.

The purposal of these ratios is to ensure that long-term assets are funded by stable resources of funding, and their relaxation means banks will have more flexibility in managing their balance sheets.

“The relaxation of the two structural liquidity ratios aims to further facilitate the flow of funds from banks into the economy,” UAE central bank governor Abdulhamid M. Saeed said.

“The temporary relaxation of NSFR and ASRR will supplement the other measures CBUAE has taken under the TESS to mitigate the impact of the COVID-19 pandemic on private corporates, small and medium-sized enterprises and individuals.”

UAE banks have accessed about 87.2 percent – or $11.872 billion – of the Dh50 billion TESS support provided by the central bank as of July while 9,527 small and medium enterprises and more than 260,600 individuals have benefited from the scheme.