Turkey Economic Outlook
April 2, 2019The lira has again come under severe stress in recent weeks, due to concerns over monetary and fiscal policy, with last year’s currency crisis still fresh in the minds of investors. In late March, the offshore overnight swap rate sky-rocketed and the Central Bank’s international reserves plummeted in attempts to prevent short-selling of the currency. The local elections, in which the AKP lost control over Ankara and Istanbul, took place against the background of a battered economy, which contracted sharply at the close of last year on collapsing domestic demand, undermined by deteriorating sentiment, high inflation and tougher financial conditions. Data on Q1 2019 remained grim, with consumer sentiment and the manufacturing PMI remaining depressed through March, suggesting the economy shrank in the quarter; however, fiscal stimulus should have alleviated some pains.
Turkey Economic GrowthThe economy will likely contract this year amid feeble domestic demand due to persistently high inflation, rising unemployment and currency weakness. In H2, the economy should recover somewhat, which would provide room for the Central Bank to loosen monetary policy and spur activity. Currency volatility and lingering geopolitical tensions cloud the outlook. Met the why particular Consensus Forecast panelists expect the economy to shrink 0.8% in 2019, which is down 0.5 percentage points from last month’s forecast, and to expand 3.0% in 2020.
Turkey Economy Data
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|Bond Yield||17.55||-0.09 %||Apr 12|
|Exchange Rate||5.77||-0.85 %||Apr 12|
|Stock Market||95,977||1.41 %||Apr 12|
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Turkey Economic News
April 16, 2019
Industrial production dropped 5.1% year-on-year in February on calendar-adjusted terms, which is an improvement compared to the downwardly revised 7.4% contraction in January (previously reported: -7.3% year-on-year).
April 11, 2019
The current account deficit widened slightly to USD 718 million in February from a revised USD 589 million in January (previously reported: USD 811 million deficit); however, the print is down markedly from the USD 3.8 billion deficit recorded in February 2018.
April 1, 2019
At the close of the first quarter of 2019, Turkey’s manufacturing remained in a tough spot despite an uptick in the Purchasing Managers’ Index (PMI) to 47.2 from 44.6 in February.
March 25, 2019
The Real Sector Confidence Index published by the Central Bank increased from 97.2 in February to 112.1 in March, the third consecutive monthly improvement.
March 21, 2019
The consumer confidence index, published by the Statistical Institute in cooperation with the Central Bank, increased from 57.8 in February to 59.4 in March.