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3 weeks ago | 
think.ing.com | Muhammet Mercan |František Táborský |James WIlson |James Wilson
Turkey's economy at a glance In the absence of any further exchange rate shock, large wage adjustments, unexpected hikes in administered prices, or jumps in commodity prices in the remainder of this year, we continue to expect inflation below 30.0%. While the deterioration in the inflation expectations is relatively contained after the March volatility, the Central Bank of Turkey (CBT) has prioritised financial stability after large reserve depletion.
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2 months ago | 
think.ing.com | Muhammet Mercan |František Táborský |James WIlson |James Wilson
Turkey's economy at a glance Economic data for the fourth quarter of 2024 shows domestic demand recovering despite tight monetary policies. Private consumption reached a record high after declines in mid-2024, while net exports made a negative contribution to growth. Indicators suggest GDP growth will continue to recover in early 2025, though the central bank considers demand conditions to support lower inflation.
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Feb 12, 2025 | 
think.ing.com | Muhammet Mercan |František Táborský |James WIlson |James Wilson
Turkey's economy at a glance In its first inflation report of this year, the CBT raised its inflation forecast again from 21% to 24%, while keeping its 2026 forecast unchanged at 12%. The revision for this year is attributable to a) an increase in the weight for services (0.8ppt), b) a revision in the projections for food inflation (to 24.5% from 22.5%, lifting the forecast by 0.5ppt) and c) administered price hikes (1.7ppt).
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Jan 23, 2025 | 
think.ing.com | František Táborský |Muhammet Mercan |James WIlson |James Wilson
Given inflation and the rapidly rising debt service, we expect a massive increase in gross borrowing needs this year despite a narrower fiscal deficit than last year. Our forecast shows a 33% increase in needs, from TRY2,494bn to TRY3,313bn. However, in terms of GDP, they decrease slightly from 5.9% to 5.8%, aligning with the five-year average.
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Jan 13, 2025 | 
think.ing.com | Muhammet Mercan
The Turkish current account (c/a) balance posted a US$2.9bn deficit in November, better than market expectations. However, this figure represents a deterioration compared to the same month in 2023, driven by foreign trade. Consequently, the 12-month rolling deficit widened to $7.4bn (approximately 0.6% of GDP) from $7.1bn a month ago, the lowest level since mid-2020. After a prolonged improvement trend since mid-2023, we believe the annual deficit is likely nearing its cyclical trough.
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Jan 8, 2025 | 
think.ing.com | Muhammet Mercan |František Táborský |James WIlson |James Wilson
Turkey's economy: at a glance In December, it was announced that a 30% increase in the minimum wage, lower than expected, would take effect from 1 January 2025. This is projected to add a measured 1ppt to headline inflation. Additionally, the number of planned MPC meetings for 2025 has been reduced from 12 to eight, suggesting larger rate cuts per meeting. This contributed to a significant 250bp cut last month.
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Dec 9, 2024 | 
think.ing.com | Muhammet Mercan |František Táborský |James WIlson |James Wilson
Turkey's economy: at a glance Year-on-year GDP growth lost momentum in the third quarter and the growth composition showed the impact of tighter monetary and financial conditions on domestic demand. We expect economic activity to remain soft in the last quarter, though some of the recent indicators ie capacity utilisation, real sector confidence, and retail and construction sector indices showed a recovery in November.
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Dec 3, 2024 | 
think.ing.com | Muhammet Mercan
Turkey Food prices drive a higher-than-expected rise in Turkish inflation The food group was once again the key driver behind Turkey’s rising inflation rate in November following a similar trend in October. Even so, the downtrend in the annual inflation rate has remained in place Turkey's inflation rate came in at 2.2% in November, higher than the market consensus (1.9%) and our call of 1.8%.
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Nov 29, 2024 | 
think.ing.com | Muhammet Mercan
Turkey Turkish GDP growth sees further deceleration in third quarter Turkey’s economic activity has lost further momentum in the third quarter thanks to tight financial conditions, while its growth composition improved further on the back of a higher contribution from net exports GDP growth in the third quarter came in at 2.1% on a year-on-year basis, below the market consensus (2.6%) and our call (2.4%), and driven by gross fixed capital formation.
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Nov 21, 2024 | 
think.ing.com | Muhammet Mercan
A few highlights to note from the accompanying statement to the CBT's decision to keep rates on hold: The CBT has issued a more positive inflation assessment, citing a) a decline in the underlying trend in October, adding that the pressure in unprocessed food inflation is deemed temporary, b) a further slowdown in domestic demand “reaching” disinflationary levels, revised from “approaching” in October, c) signs of improvement in services inflation becoming more apparent, which was expected to...
