Turkey Economic Outlook
June 4, 2019High inflation, elevated unemployment, pervasive consumer pessimism and currency weakness continued to ravage the economy, leading to a marked contraction in the first quarter. The economy’s tough spot was further highlighted by feeble business and consumer credit growth in Q1, as well as ongoing weakness in the important construction sector, chiefly due to the cheap lira. Moreover, second-quarter data suggests that the economy remains in a predicament: Consumer credit growth was still weak in April; operating conditions in the manufacturing sector deteriorated in the same month; and consumers remained dejected through May. Against this backdrop, domestic and international political pressure has risen in recent weeks due to the annulment of the Istanbul mayoral election result and the two-week ultimatum given to Turkey by the U.S. on 23 May to cancel the purchase of Russian missiles.
Turkey Economic GrowthThe economy will likely contract this year due to collapsing domestic demand induced by high inflation, rising unemployment and a weak lira. However, the economy should begin to recover towards the end of the year as inflation softens, providing room for monetary policy easing. Lingering geopolitical tensions and currency volatility cloud the outlook, however. Met the why particular Consensus Forecast panelists expect the economy to shrink 1.3% in 2019, which is down 0.3 percentage points from last month’s forecast, and to expand 2.7% in 2020.
Turkey Economy Data
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|Bond Yield||17.36||-0.09 %||Jun 13|
|Exchange Rate||5.87||-0.85 %||Jun 13|
|Stock Market||90,501||1.41 %||Jun 13|
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Turkey Economic News
June 12, 2019
At its 12 June meeting, the Monetary Policy Committee of the Central Bank of the Republic of Turkey (CBRT) decided to keep the one-week repo rate unchanged at 24.00% for the sixth consecutive meeting.
June 6, 2019
Consumer prices rose 0.95% month-on-month in May, down from April’s 1.69% increase.
June 3, 2019
The downturn in the Turkish manufacturing sector intensified in May, with the Istanbul Chamber of Industry and IHS Markit’s Purchasing Manufacturers’ Index (PMI) dropping to 45.3 in May from 46.8 in April.
May 31, 2019
As widely expected, national accounts data showed that the economy continued to shrink in the first quarter of the year, contracting 2.6% year-on-year (Q4: -3.0% year-on-year); however, the contraction was less severe than market analysts had expected, as a surge in pre-election government expenditure cushioned the fall somewhat.
May 23, 2019
Confidence among Turkish business turned pessimistic in May, with the Real Sector Confidence Index falling to 98.9 from 115.5 in April, which had marked the best result since June 2018.