Turkey Economic Outlook
February 5, 2019The economy has begun the new year in uninspiring fashion. In January, the manufacturing PMI remained mired in contractionary territory, with new orders, output and employment continuing to shrink. Moreover, both consumer and business sentiment stayed markedly pessimistic in the same month. This comes after a likely weak outturn in Q4, with consumer spending suffering on the back of high inflation and elevated interest rates, as evidenced by sharp contractions in retail sales in October and November. More positively, the pace of the decline in private-sector credit eased in December, while the external sector has recently seen a marked turnaround—underpinned by the weaker lira and soft domestic demand—as reflected by a fourth consecutive current account surplus in November. In January, the Central Bank announced it was bringing forward the payment of its dividend, which will boost government coffers ahead of the March local elections.
Turkey Economic GrowthThe economy is set to remain fragile in the months ahead, with restrictive financial conditions constraining private consumption and fixed investment. However, the external sector will provide support, and a recovery should gradually take hold in H2 as lower inflation gives the Central Bank room to cut interest rates. Currency volatility and the possibility of renewed geopolitical tensions pose significant downside risks. Met the why particular panelists expect the economy to shrink 0.2% in 2019, which is down 0.2 percentage points from last month’s forecast, and to expand 3.1% in 2020.
Turkey Economy Data
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|Bond Yield||14.56||-0.09 %||Feb 14|
|Exchange Rate||5.27||-0.85 %||Feb 14|
|Stock Market||112,130||1.41 %||Feb 14|
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Turkey Economic News
February 14, 2019
The current account balance recorded a USD 1.4 billion deficit in December, contrasting November’s revised USD 1.1 billion surplus (previously reported: USD 1.0 billion surplus) but down from the USD 7.8 billion deficit recorded in the same month a year prior.
February 4, 2019
Consumer prices rose 1.06% from the previous month in January, contrasting December’s 0.11% decline, according to data released by the Turkish Statistical Institute (Turkstat).
February 1, 2019
The Purchasing Managers’ Index (PMI), produced by the Istanbul Chamber of Industry (ICI) and IHS Markit, was stable at 44.2 in January.
January 25, 2019
The Real Sector Confidence Index published by the Central Bank increased from 91.5 in December to 93.0 in January.
January 23, 2019
The consumer confidence index, published by the Statistical Institute in cooperation with the Central Bank, worsened from a revised 58.7 in December (previously reported: 58.2) to 58.2 in January.