Turkey Economic Outlook
May 8, 2018President Erdogan recently called snap elections for 24 June, against the backdrop of an economy beginning to show signs of strain from the government’s fiscal stimulus drive. The manufacturing PMI crashed into negative territory in April on lower new orders and employment, while the current account deficit ballooned in annual terms in the first two months of the year. In addition, the lira fell to an all-time low against the dollar in early May, prompting the Central Bank to tweak banks’ reserve requirements in an attempt to halt the decline. Citing worsening external metrics and rising imbalances, on 1 May Standard and Poor’s downgraded Turkey’s credit rating; this came after a similar move by Moody’s in March. More positively, industrial production growth was solid in February, while business sentiment remains elevated. In addition, economic growth in Q1 was likely robust, despite a moderation from Q4’s blistering pace. Ahead of polling day, the government is turning the fiscal taps on full blast, and it recently announced major new spending initiatives.
Turkey Economic GrowthThe economy is expected to lose momentum this year after performing above potential in 2017, as credit growth ebbs amid tighter financial conditions, and fiscal stimulus gradually dims. Exchange rate volatility, geopolitical tensions, a widening current account deficit and elevated inflation pose downside risks. FocusEconomics panelists expect growth of 4.4% this year, which is up 0.3 percentage points from last month’s estimate. They see growth of 3.9% in 2019.
Turkey Economy Data
5 years of Turkey economic forecasts for more than 30 economic indicators.
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|Bond Yield||14.58||-0.09 %||May 21|
|Exchange Rate||4.57||-0.85 %||May 21|
|Stock Market||102,258||1.41 %||May 21|
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Turkey Economic News
May 23, 2018
In an emergency meeting held on 23 May, the Central Bank of the Republic of Turkey (CBRT) hiked the late liquidity window rate—the rate through which all financing is currently delivered—by 300 basis points from 13.50% to 16.50%.
May 14, 2018
The current account balance recorded a USD 4.8 billion deficit in March, widening from the USD 3.1 billion deficit recorded in March 2017.
Turkey: President Erdogan calls snap elections for June, government announces additional fiscal stimulus measures
May 3, 2018
On 18 April, President Recep Tayyip Erdogan announced that snap presidential and parliamentary elections would be held on 24 June, bringing forward a vote that was due in 2019.
May 3, 2018
Consumer prices rose 1.87% from the previous month in April, up from March’s 0.99% rise and overshooting analysts’ expectations.
May 2, 2018
Manufacturing conditions worsened sharply in April, with the Purchasing Managers’ Index (PMI), produced by the Istanbul Chamber of Industry (ICI) and IHS Markit, sinking to 48.9 from 51.8 in March.