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Main predictions

The World Bank assumes that the global economy grew by more than 5.5%, while this year’s growth assumption is 4.1%. They assumed that growth would slow down in the year 2022. During Covid-19, government spending was quite high, but this year it will decline. This year, there are also factors that cause the deceleration. For example, the omicron mutation.

According to the World Bank report, the global economy has grown by around 5% in the year 2021. Economies are expected to return to their usual investment and consumption patterns.

Unfortunately, the networks have been negatively influenced since low fertility rates, permanent scars from the pandemic, monetary and financial constraints, and rising inflation. These factors have had a strong influence on the networking between economies, resulting in bumpy landing probabilities.

What are the biggest risks facing the global economy?

The world’s two largest economies, the United States and China, have been engaged in a trade battle since July. After the debates, which have been going on since July 2021, the United States announced that goods in China worth more than $24 million would require payment of an additional tariff. China responded to this decision with retaliation. According to information from Bloomberg, in order to slow down the debates between China and the United States, new meetings will take place. It has been alleged that confidential talks have taken place between US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He to resume negotiations.

Whether the trade war fades or continues to escalate will be the biggest determinant of how the global economy evolves.

Projected growth expectation

The World Bank, in its June report, argued that it expects the global economy to grow strongly by 3.1% in 2018.

Over the next two years, global economic growth is expected to slow due to slowing economies in developed countries and decelerating economies in developing countries.

Where does Turkey fit in the global economy

The first of two simple conjectures used to equate the economic sizes of countries is the gross domestic product (GDP), which shows the size of economic activity in dollars over a year, and the other is the local currency. necessary to buy a certain group of products in one country, to buy the same group of products in the other country. The purchasing power index corresponds to the money needed. According to this, at the end of 2019, Turkey occupied the 19th place. When purchasing power is compared to other countries, Turkey’s place is ranked higher than many others. Moving from 14th to 13th place in 2016, the Turkish economy has moved closer to the top 10 in terms of purchasing power. Although Turkey has a smaller economy in this ranking, it leaves behind countries like South Korea, Spain and Canada.

Turkey’s share in world exports has increased from 0.3% in 1948 to 1.1% in 2021. While Turkey’s share in world GDP was 0.65% in 2003, it has fallen to 58% in 2021. Imports have always exceeded exports in Turkey throughout history. The figures indicate that it is imperative for Turkey to move to a production-based economy plan. A rentier economy or an export-based economy does not improve Turkey’s income compared to the world average.

The United States alone executes $22 trillion out of the $90 trillion of the world’s national product; China follows with $16 trillion. World order or disorder is also provided by these two countries. In other words, it is possible to have a say in the world depending on the size of production. Turkey’s current 0.6% share does not allow this.

A 5% share is necessary to be able to participate in discussions concerning the global economy. This is made up of $4.5 trillion in GDP and $1 trillion in exports. In other words, Turkey should adopt some economic strategies similar to the German economy.

Turkey’s gross national product, which started to take off in dollars with the currency crisis in 2018, was announced by TUIK at $717 billion and $719 billion by IMF in 2020. This indicates that the world economy saw a decrease from 2019 which was $84 trillion 540 billion in 2020. Turkey’s share in 2020 was 0.85%.

Yasam Ayavefe

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