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Turkish economic and financials developments 

Macro: Manufacturing industry slightly improved
02 October 2023

Istanbul Chamber of Industry Türkiye Manufacturing Purchasing Managers' Index (PMI) rose by 0.6 points to 49.6 in September.



Macro: Outlook in manufacturing industry improved monthly
25 September 2023

The September Business Tendency Survey and Sectoral Confidence Indices revealed a more favorable outlook compared to the previous month.



MPC decision: Policy normalization continues
21 September 2023

CBRT raised the policy rate by 500 basis points to 30% in September, in line with expectations.



Macro: Budget surplus again in August
15 September 2023

The central government budget balance posted a surplus of TRY51.3 bn in August. In January-August period, the budget deficit was TRY383.4 bn and the 12-month cumulative deficit declined to TRY559 bn.



Industrial production decreased by 0.4% mom in July
11 September 2023

The seasonally and calendar adjusted Industrial Production (IP) Index decreased by 0.4% in July on a monthly basis. However, due to calendar and base effects, it increased by 18.7% yoy.

Adjusted for these two effects, the annual increase is close to that of the previous months, while the average monthly increase over the last two months is quite moderate at 0.4%.



Current account balance posted a deficit of $5.5 billion in July
11 September 2023

In July, the current account posted a deficit of $5.5 billion, due to foreign trade deficit despite the increasing contribution of services revenues. The cumulative current account deficit (CAD) in the first seven months amounted to $42.3 billion.



Macro: External deficit remains high
05 September 2023

According to the provisional statistics of the Ministry of Trade for August, foreign trade deficit remained high at $8.9 billion on a monthly basis, while the 12-month cumulative deficit narrowed to $118.4 billion.



Inflationary process becomes evident
04 September 2023

Consumer prices rose by 9.09% in August and annual inflation increased from 47.8% to 58.94%.

Thus, cumulative inflation for the July-August period reached 19.4%, indicating that the 37% depreciation in the last three months was largely passed through to prices along with wage and tax increases.

CPI sub-items show that high price increases are widespread.



Macro: Domestic demand-led growth continues
31 August 2023

In Q2, national income grew by 3.8% yoy, below our expectations, but recorded a strong quarterly increase of 3.5%, in line with our expectations. Annual and quarterly growth continued to be driven by domestic demand, while the negative contribution of net exports strengthened. The quarterly increase was also driven by the technical recovery from the weak outlook in the previous quarter, which was driven by the chain indexing, contrary to what the sectoral data implied.



Sharp revision to inflation forecasts
27 July 2023

In the first inflation report following the change in the economy management, the CBRT made a significant upward revision in 2023, 2024 and 2025 year-end inflation forecasts, which have been unrealistic recently. 2023 year-end inflation increased by 35.7 points from 22.3% to 58%; 2024 year-end inflation was increased from 8.8% to 33%, and the end-year inflation rate for 2025 was increased from 5% to 15%



Weaker growth in Q1 than leading indicators implied
31 May 2023

In Q1, growth was weaker than our expectations and continued to be driven by domestic demand



Annual headline inflation increased to 83.45% yoy, with the core C hitting 68.09%
03 October 2022

CPI inflation was below the market expectations in September with 3.08% monthly increase. As a consequence, annual inflation rose from 80.21% to 83.45%, setting another yoy record in the revised series (2003=100).

The continuing upward trend in inflation was mainly driven by the contribution of housing, food, household equipment, restaurants-hotels and transportation. Core-B  index also hiked by 2.74% MoM, bringing its annual rate to 74.63%, up from August’s 72.53%.



CBRT decision: Emphasis on risks on global growth and inflation
23 June 2022

Risks on global growth and already high global inflation continue. The divergence of monetary policy steps and communications of developed countries' central banks are increasing due to their diverse economic Outlook.


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