Turkey Economic Outlook
September 8, 2020The Covid-19 pandemic severely derailed the economy in Q2, with GDP contracting at the steepest rate in over a decade as restrictive measures at home and abroad weighed heavily on domestic and foreign demand. Private consumption nosedived in the quarter, while exports collapsed by over a third compared to a year prior—the strongest decline since current records began in 1999. Looking to the third quarter, prospects are not much rosier. Consumer confidence remained entrenched in pessimistic territory in July–August, while manufacturing capacity in August was still below the levels seen during the aftermath of the 2018 currency crisis. On the other hand, business confidence rose notably in July–August, while manufacturing business conditions improved greatly and consumer credit growth skyrocketed in July. That said, the ongoing lira depreciation will weigh on businesses and households.
Turkey Economic GrowthA contraction is expected this year due to the pandemic, with containment measures restricting domestic and foreign demand. The weakening currency should continue to weigh on the private sector, while a rising unemployment rate limits household spending. Fiscal and monetary stimulus should cushion the fall somewhat, however. FocusEconomics Consensus Forecast panelists project the economy to contract 4.0% in 2020, which is up 0.1 percentage points from last month, and to expand 4.9% in 2021.
Turkey Economy Data
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|Bond Yield||12.00||-0.09 %||Dec 31|
|Exchange Rate||5.95||-0.85 %||Jan 01|
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Turkey Economic News
September 14, 2020
Industrial output rose 4.4% year-on-year in July (June: +0.4% yoy).
September 11, 2020
The current account balance swung to a USD 1.8 billion deficit in July from a USD 2.0 billion surplus in July 2019 (June 2020: USD 2.9 billion deficit).
September 7, 2020
On 4 September, the Turkish lira traded at TRY 7.44 per USD, a new all-time low.
September 4, 2020
The economy contracted 9.9% on an annual basis in the second quarter, contrasting the first quarter's 4.4% increase and marking the sharpest downturn since Q1 2009.
September 3, 2020
Consumer prices rose 0.86% over the previous month in August, picking up from the 0.58% rise recorded in July.