Turkey Vs Greece

Indonesia, past (1998) and Now

Note: All the estimates were sourced from IMF data and made in 2017 before the 2018 Turkish crisis hit. As for Turkey’s estimation number, it may
no longer relevant. However, it still displayed for further insight.

Row Labels 1996 1997 1998 1999 2010 2011 2012 2013 2015 2016 2017 2018e 2019e 2020e 2021e 2022e 2023e
GDP (USD Bn)
Greece 145.872 143.326 144.644 149.412 299.919 288.062 245.807 239.937 195.64 192.77 200.69 226.774 235.836 246.069 255.719 264.528 274.159
Indonesia 274.722 260.68 115.323 169.158 755.256 892.59 919.002 916.646 860.741 932.445 1015.411 1074.966 1152.889 1247.654 1340.765 1440.885 1548.5
Turkey 250.263 261.775 276.012 256.485 772.29 832.497 873.696 950.328 859.449 863.39 849.48 909.885 961.655 1025.646 1089.7 1155.941 1223.882
GDP (% Change)
Greece 2.863 4.484 3.895 3.072 -5.478 -9.132 -7.3 -3.242 -0.291 -0.244 1.351 2.024 1.829 1.794 1.622 1.04 1.859
Indonesia 7.818 4.7 -13.127 0.791 6.378 6.17 6.03 5.557 4.876 5.033 5.068 5.3 5.5 5.6 5.6 5.6 5.6
Turkey 7.007 7.528 3.092 -3.389 8.487 11.113 4.79 8.491 6.086 3.184 7.047 4.411 3.97 3.623 3.564 3.612 3.585
GDP PcP (USD)
Greece 13,777 13,484 13,527 13,902 26,973 25,897 22,172 21,805 18,018 17,876 18,637 21,144 22,077 23,128 24,180 25,164 26,237
Indonesia 1,394 1,308 572 830 3,178 3,689 3,745 3,684 3,369 3,604 3,876 4,052 4,291 4,585 4,866 5,164 5,480
Turkey 4,096 4,221 4,387 4,019 10,476 11,141 11,553 12,395 10,915 10,817 10,512 11,114 11,602 12,225 12,834 13,455 14,083
GDP PcP (% Change)
Greece -2.12 0.32 2.77 -3.99 -14.38 -1.65 -0.79 4.26 13.45 4.76 4.55 4.07 4.27
Indonesia -6.19 -56.27 45.01 16.06 1.52 -1.62 6.97 7.53 4.54 6.86 6.12 6.12 6.12
Turkey 3.05 3.95 -8.39 6.35 3.70 7.29 -0.89 -2.82 5.73 5.36 4.99 4.84 4.67

Let's not forget that when the euro crisis started and Greece looked doomed to failure, Turkey was often cited as one good example. Overall
Turkey’s economic performed much better then Greece. From 2010 to 2012, Turkey’s economy strongly rebounded, producing 8.5% (2009 to 2010)
and 11.11% (2010 to 2011) while her emerging market counterpart, Greece, get had started to show the symptom with growth of -5.5% (2009 to
2010) and worse -9.1% (2010 to 2011). Turkey was not displaying poor growth performance when compared to the troubles of European countries
and the European Union in 2012. The 4.9% percent figure was a “success” in comparison to the global economic slowdown, the deepening of the
European crisis, rising geopolitical tensions in the region and high oil prices.
Even though Turkey showed a positive growth of 7.05% in 2017 while Greece only grew 1.351%, Greece is estimated to show a better growth of
2.02% in 2018 while Turkey was estimated to show a slower growth down to 4.411 (IMF estimation in 2017 before current crisis hit). Since the
beginning of the year, the lira has shed almost half its value against the dollar. Inflation has reached 15 percent. The higher US tariffs on Turkish
steel and aluminum exports and their market impact worsen the crisis in Turkey. Of course, the specter of contagion is going around in Europe.
Investors are worried about their money. Capital outflows and the lira's devaluation are nurturing fears that companies and banks will not be able
to pay back loans taken out in euros or dollars. Will also spread its contagion to Greece as it also hit other Emerging Markets far away such as
Argentina and Indonesia?

As part of the 2015 bailout program, Greece adopted economic reforms, including cutting public spending and privatizing state assets. Two years
later, the IMF urged Brussels to ease its bailout program terms and provide extensive debt relief. In order to help Greece meets its bailout terms,
Tsipras agreed to extend tax and pension reforms. On January 15, 2018, the Greek parliament agreed on new austerity measures to qualify for the
next round of bailouts. As Greece continue with her Austerity measure, Turkey’s 2018 Crisis should not affect significantly to Greece Economy
Just a decade ago, Indonesia's economy these days seems a remarkably sturdy structure. Having been worse hit than any other by the Asian
economic crisis of 1997-98. In 1998, Indonesia suffered an economic meltdown. GDP contracted by 13.1% in that year alone. The rupiah fell from
around 2,000 to the dollar in 1997 to nearly 16,800 at one point, a decrease in value of 840 percent. Recovery was unexpectedly quick. Annual
growth averaged a respectable 5.4% in 2003-07 and by 2005 GDP per person had recovered to its pre-crisis level of 1997
Since Turkey suffered an economic crisis of confidence in September – with its currency falling by some 40% in August alone – emerging markets
around the world, from South Africa to Indonesia, have also experienced plummeting currencies and an outflow of foreign investment. Argentina,
which had stabilised after a crisis earlier in the year, has fallen back into emergency mode, increasing interest rates to 60%. Its currency, the peso,
has fallen by 45% in 2018 and 24% in September. In each of the different emerging markets, each economic shows different ways but with the
same outcome – loss of confidence by investors, an outflow of funds, and a fall in the value of their currencies.
Argentina, Turkey, South Africa and Indonesia have all been different, but they share one thing in common – a disproportionate reliance on foreign
funding for trade and government deficits. Almost uniquely for an ASEAN country, Indonesia has a big current-account deficit (it hit over $2 billion
in July, the highest it has been in five years), and has Asia’s highest external debt, at almost 30% of GDP (See Table below). Those factors have
made it vulnerable. Worse story goes with Turkey.
Row Labels 1996 1997 1998 1999 2010 2011 2012 2013 2015 2016 2017 2018e 2019e 2020e 2021e 2022e 2023e
Curr Acc Balance %of GDP
Greece -3.492 -3.72 -2.624 -3.579 -11.38 -10.006 -3.831 -2.041 -0.229 -1.075 -0.818 -0.762 -0.591 -0.355 -0.243 -0.118 0.015
Indonesia -2.657 -1.458 3.469 3.4 0.702 0.189 -2.657 -3.176 -2.035 -1.818 -1.703 -1.923 -1.882 -1.989 -1.959 -1.989 -1.956
Turkey -0.974 -1.008 0.725 -0.361 -5.777 -8.937 -5.49 -6.697 -3.736 -3.838 -5.545 -5.401 -4.778 -4.489 -3.927 -3.578 -3.332
Gov gross debt %of GDP
Greece 101.335 99.452 97.425 98.906 146.25 172.096 159.586 177.946 178.779 183.453 181.906 191.271 181.782 177.036 172.185 168.704 165.097
Indonesia 0 0 0 0 24.525 23.106 22.96 24.847 27.46 28.335 28.913 29.633 30.251 30.697 31.097 31.491 31.65
Turkey 0 0 0 0 40.083 36.479 32.724 31.382 27.643 28.311 28.482 27.792 27.855 27.943 28.01 28.102 28.149
GNS %of GDP
Greece 19.862 18.722 22.552 20.561 5.664 5.099 8.972 9.56 9.59 9.535 10.91 11.962 13.37 14.525 15.18 15.599 15.846
Indonesia 22.992 24.959 17.022 12.485 33.582 33.173 32.415 30.656 32.028 32.027 31.744 31.978 32.341 32.424 32.632 32.77 32.974
Turkey 20.465 20.775 25.497 21.491 21.334 22.449 22.786 23.179 24.777 24.472 25.759 26.008 26.478 26.514 26.924 26.988 26.949
Gov Tot Expenditure %of GDP
Greece 45.083 43.706 45.149 46.154 52.478 54.086 52.426 51.449 50.922 49.704 48.807 48.847 48.278 47.708 46.671 46.667 47.475
Indonesia 11.508 15.25 15.079 15.14 16.886 17.713 18.836 19.081 17.478 16.818 16.466 16.68 16.559 16.533 16.615 16.702 16.775
Turkey 0 0 0 0 36.246 33.406 34.441 34.234 33.429 35.079 33.775 33.631 33.827 33.51 33.352 33.332 33.305
*GNS = Gross National Saving

Turkey's deficit is quite large at 5.5% of national income, or GDP, last year (see table above). hat deficit has to be financed, either by foreign
investment or by borrowing. There are two features of Turkey's foreign debt that also increase its vulnerability.
First, it has a high level of debt due for repayment in the near future. he debt has to be refinanced. Credit rating agency Fitch estimates that
Turkey's total financing needs this year will be almost $230bn.Second, many Turkish companies have borrowed in foreign currency. Those loans
become more expensive to repay if the value of the national currency declines - which it has.
The most dangerous things, how her president go all in opposite direction with his rather unconventional economic believe and his seemingly
never ending clash with Trump. While Argentina and Indonesia are doing the right thing by increasing the interest rate (up to 60% in Argentina’s
case), Erdogan sill stubborn to avoid the much needed rate hike.
However, Indonesia is reasonably in a good shape to defend itself, having started the year with over $130 billion in foreign exchange reserves for
just such a contingency. To improve its current account deficit, the government has announced it will curb imports. While this trade imbalance is
putting pressure on the rupiah, it is also a sign that the economic fundamentals of the country are pretty solid. Strong demand for imported
consumer goods suggests aggregate demand in the economy is healthy, while increased imports of heavy machinery and capital goods is a sign of
investment in things that drive long-run economic. When it comes to debt, Indonesia is also looking pretty good, as there is a legal cap on how
large of a deficit the government can run in any fiscal year – 3 percent of GDP and current , and from 2015-2017 it well below this cap (ranging
from -2.03% in 2015 improved to -1.73% in 2017 and estimated to sit on -1.93% in 2018). The Government now generally keeps away from over-
exposing itself to debt traps. With almost $120 billion remaining in foreign currency reserves and a low debt-to-GDP ratio, Indonesia’s public
finances are in a pretty sound position to continue defending the currency.
Row Labels 1996 1997 1998 1999 2010 2011 2012 2013 2015 2016 2017 2018e 2019e 2020e 2021e 2022e 2023e
Implied PPP of Local Currency
Greece 0.584 0.612 0.637 0.65 0.702 0.693 0.678 0.652 0.615 0.602 0.595 0.587 0.58 0.576 0.574 0.574 0.574
Indonesia 690 763 1,324 1,488 3,425 3,607 3,674 3,795 4,044 4,092 4,190 4,242 4,290 4,357 4,420 4,481 4,537
Turkey 0.036 0.065 0.113 0.172 0.931 0.987 1.041 1.089 1.225 1.308 1.426 1.556 1.692 1.813 1.925 2.041 2.162
Implied PPP of Local Currency (% change)
Greece 4.79 4.08 2.04 -1.28 -2.16 -3.83 -2.11 -1.16 -1.34 -0.69 -0.35 0.00 0.00
Indonesia 10.68 73.39 12.44 5.29 1.88 3.30 1.19 2.40 1.23 1.56 1.45 1.39 1.24
Turkey 80.56 73.85 52.21 6.02 5.47 4.61 6.78 9.02 9.12 7.15 6.18 6.03 5.93
Inflation (Average, % Change)
Greece 7.873 5.441 4.517 2.141 4.704 3.118 1.035 -0.854 -1.094 0.013 1.138 0.696 1.134 1.46 1.74 1.74 1.66
Indonesia 8.379 6.194 58.02 20.75 5.14 5.344 3.981 6.413 6.363 3.526 3.809 3.526 3.397 3.553 3.38 3.129 3.004
Turkey 80.236 85.653 84.721 64.87 8.566 6.472 8.892 7.493 7.671 7.775 11.144 11.397 10.501 9.005 8.001 8 8
Unemployment rate %of Tot labor force
Greece 10.3 10.3 11.2 12.125 12.725 17.85 24.425 27.475 24.9 23.55 21.45 19.834 17.99 16.362 15.15 15 14.738
Indonesia 4.998 4.77 5.46 6.36 7.14 6.56 6.14 6.25 6.18 5.61 5.4 5.2 5.01 5 5 5 5
Turkey 6.124 6.318 6.373 7.155 11.127 9.096 8.432 9.041 10.279 10.907 11.007 10.659 10.659 10.55 10.55 10.55 10.55

Another big shot for Turkey Vs Indonesia in this crisis. While Indonesian Rupiah Implied PPP of local currency only change at the rate of 1.19%-
2.45% in 2015-2017, Turkish Lira was steadily decreased in value with worrying rate of 6.78% - 9.02% at the same time. The Turkish inflation is
running wild to 11.14% in 2017 with no proper measure while Indonesia still sit comfortably below the cap of 5%. In 2016 and 2017. That is why
even though some contagion will hit at some point, Indonesia is resilient enough to defend herself.