Chart of the Week: V-Shaped Recovery

If you want to see the right shape for an economic recovery, have a look at Turkey.

In 2009 the nation suffered its worst recession on record – its GDP shrank roughly 15 percent year-over-year in the first quarter of last year (see red line on chart below).

But since that bottom, Turkey has bounced back with a V-shared recovery – in the fourth quarter of 2009, GDP grew 6 percent compared to a year earlier. The domestic market was the key – strong consumption growth (light blue bar) more than made up for a slight decline in net exports (dark blue) in the quarter.

Among the G-20 group of industrial nations, Turkey was second only to China in its GDP growth in the fourth quarter.

The chart also shows some of Turkey’s neighbors in emerging Europe and how they are mending their economies after the Great Recession. In both Hungary and Poland, the recovery is U-shaped, while the Czech Republic, Romania and Latvia are trending sideways in an L-shaped pattern.

Turkey’s growth pattern is likely to continue to stand out in the region. In addition to a vibrant export economy, growing household consumption is likely to play a significant role in the recovery in 2010 as Turkey can hope for more domestic demand stimulus than other countries.

About Frank Holmes 264 Articles

Affiliation: U.S. Global Investors

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure.

The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories.

Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.”

He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies.

Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications.

Visit: U.S. Global Investors

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