Turkey
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May 09, 2024
CBRT Lifts End-Year Inflation Forecast to 38%
May 9, 2024 10:22 AM UTC
Bottom Line: Central Bank of Turkiye (CBRT) released the second quarterly inflation report of the year on May 9, and lifted end-year inflation prediction from 36% to 38% citing that the rebalancing process for demand will be more delayed compared to what was projected that in the first inflation rep
May 03, 2024
Turkiye’s Inflation Continues to Jump in April with 69.8%
May 3, 2024 7:40 AM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on May 3 that Turkish CPI ticked up 69.8% annually and 3.2% monthly in April due to increases in transportation, restaurant & hotel and education prices, coupled with the lingering impacts of the wage hikes on the services sector. We feel u
April 25, 2024
CBRT Kept Key Rate Unchanged at 50%
April 25, 2024 3:25 PM UTC
Bottom Line: As predictions were centred around no change, Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% on April 25 despite galloping inflation, and pressure on FX lately. According to the CBRT statement, monetary policy stance will be tightened in case a significant and persist
April 22, 2024
April 19, 2024
Services Surplus and Decreasing Trade Deficit Partly Heal Turkish Current Account Deficit
April 19, 2024 12:18 PM UTC
Bottom Line: Turkiye’s annualized current account deficits (CAD) stood at $31.8 billion as of February 2024 when compared to $37.6 billion a month earlier, driven by a marginal increase in the services surplus, a reduction in the gold trade deficit, and a recovery in net energy trade. We envisage
April 03, 2024
Turkiye’s March Inflation Ticks Up to 68.5% Despite Continued Tightening
April 3, 2024 9:16 AM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on April 3 that Turkish CPI surged to 68.5% annually and 3.2% monthly in March, and annual inflation swung to a 16-month high due to increases in food and education prices, coupled with the lingering impacts of the minimum wage hike on the
March 27, 2024
March 26, 2024
EM FX Outlook: Domestic Drivers Key
March 26, 2024 9:01 AM UTC
In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries. Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)
March 25, 2024
EMEA Outlook: Elections Set the Scene in Q2
March 25, 2024 2:00 PM UTC
· Unlike South Africa and Russia, Turkiye continued with tightening monetary policy in Q1 due to stubborn inflation, pressure on FX and reserves. Meanwhile, Russia and South Africa halted their tightening cycles as of 2024 and will likely start cutting interest rates in Q3 depending on how
March 21, 2024
Inflationary Pressures Caused CBRT to Restart Tightening Cycle and Hike Key Rate to 50%
March 21, 2024 4:26 PM UTC
Bottom Line: Despite predictions were centred around no change, Central Bank of Turkiye (CBRT) increased the policy rate by 500 bps to 50% on March 21 due to strong inflation, and pressure on FX and reserves lately. According to the CBRT statement, the current level of the policy rate will be mainta
March 07, 2024
Turkiye: AKP Wants to Win Major Cities Back on March 31
March 7, 2024 2:37 PM UTC
Bottom line: Unless something unforeseen occurs, we think Justice and Development Party (AKP) will likely remain the highest rated party in the Turkish local elections on March 31, winning more local municipalities than any other parties in Turkiye. Despite AKP’s main target is to win back the maj
March 04, 2024
Turkiye’s Closer to 70% Inflation in February Exceeds Expectations
March 4, 2024 3:10 PM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on March 4 that Turkish CPI surged to 67.1% annually and 4.5% monthly in February, and annual inflation swung to a 15-month high due to increases in hotel, education and food prices. We feel upside risks remain strong which would likely co
February 29, 2024
Exceeding Expectations: Turkish Economy Grew by 4.5% in 2023
February 29, 2024 12:28 PM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on February 29 that the economy expanded by 4.5% last year, and 4.0% YoY in Q4 2023 driven by the buoyant demand and lending, high government expenditure and investments during the election-and-earthquake-year. Despite strong Q4 figure, we
February 22, 2024
CBRT Left the Key Rate Constant at 45%
February 22, 2024 12:53 PM UTC
Bottom Line: As we predicted, Central Bank of Turkiye (CBRT) ended monetary hiking cycle under new governor, and kept the key rate stable at 45% after eighth straight rate hikes since presidential elections last May. According to the CBRT statement, the current level of the policy rate will be maint
EMFX: Carry and Domestic Fundamentals Rather Than the USD
February 22, 2024 10:00 AM UTC
Bottom Line: Most major EMFX currencies have performed better than the Euro or the Japanese Yen against the USD in 2024 (Figure 1). This is due to carry trades in Latam, but elsewhere reflects global equity love on Indian equities or domestic fundamentals. This resilience for Brazilian Real/Indi
February 05, 2024
Turkiye’s Inflation Roared Strong in January: Biggest Monthly Jump since August
February 5, 2024 8:57 AM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on February 5 that Turkish CPI surged to 64.9% annually and 6.7% monthly in January, which marked the biggest jump in the last five months, due to recent hikes in salaries and pensions, continued adverse impacts of deterioration in pricing
February 01, 2024
Current Account Deficit Continues to Give Pain to Turkish Economy
February 1, 2024 11:59 AM UTC
Bottom Line: Turkiye continues to struggle due to high current account deficits (CAD) in the recent years as it has been a structural feature of Turkiye's economy for far longer. Annualized CAD stood at $49.6 billion as of November 2023, partly due to trade deficit that slightly improved in 2023. We
January 25, 2024
CBRT Started the New Year with a 250 bps Rate Hike
January 25, 2024 11:52 AM UTC
Bottom Line: As we pencilled a 250 bps policy rate hike by Central Bank of Turkiye (CBRT) on January 25 MPC meeting, CBRT continued its monetary tightening cycle by lifting the key rate from 42.5% to 45%. This is the eighth straight rate hike by CBRT since May presidential elections, simply to fight
January 18, 2024
January 11, 2024
Webinar Recording December Outlook: Rate Cuts Into 2024
January 11, 2024 8:22 AM UTC
You can now access the webinar for the December Outlook here.
To read the individual chapters please see the weblink below.
Outlook Overview: Rate Cuts Into 2024 (here)
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
China Outloo
January 08, 2024
Charting our Views December Outlook
January 8, 2024 9:05 AM UTC
Outlook Overview: Rate Cuts Into 2024 (here)
Economic Scenarios
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
Brazil Policy Rate and CPI Inflation (YoY, %)
China Outlook: Headwinds To China Growth (here)
Japan Outlook: Normalizing
January 03, 2024
Turkiye’s Inflation Reaccelerated Fast in December to 64.8%
January 3, 2024 8:33 AM UTC
Figure 1: CPI (YoY, % Change) and Policy Rate (%), January 2021 – December 2023
Source: TUIK, Datastream, Continuum Economics
When annual rate of changes (%) in the CPI’s main groups are examined in December, we see that housing with 40.4% was the main group with the lowest annual increase while h
January 02, 2024
December Outlook: Rate Cuts Into 2024
January 2, 2024 9:53 AM UTC
Outlook Overview: Rate Cuts Into 2024 (here)
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
China Outlook: Headwinds To China Growth (here)
Japan Outlook: Normalizing Monetary Policy Soon (here)
Asia/Pacific (ex-China/Japan) Outlook:
December 21, 2023
CBRT Continued Monetary Tightening Cycle on December 21, but with a Lesser Pace
December 21, 2023 12:19 PM UTC
Figure 1: CPI (YoY, % Change) and Policy Rate (%), January 2021 – December 2023
Source: Turkish Statistical Institute, Datastream, Continuum Economics
The CBRT raised the policy rate from 40% to 42.5% on December 21 MPC meeting to establish the disinflation course as soon as possible, to anchor infl
December 19, 2023
EM FX Outlook: USD Decline v Inflation Differentials
December 19, 2023 9:59 AM UTC
· In spot terms, we see the Indonesian Rupiah (IDR) and Malaysian Ringgit (MYR) rising against the USD as Fed rate cuts narrow interest rate differentials and a move away from an overvalued USD occurs. Brazilian Real (BRL) and Mexican Peso (MXN) will likely be stable against the USD
December 18, 2023
Outlook Overview: Rate Cuts Into 2024
December 18, 2023 3:42 PM UTC
· Uncertainty still prevails around this central view. The impact of lagged monetary tightening could be greater than our estimates and deliver mild recessions in some DM countries. We also feel that the disinflationary process could be stronger and this would help bring inflation back
EMEA Outlook: Inflationary Pressures Remain Strong
December 18, 2023 10:01 AM UTC
Our Forecasts
Source: Continuum Economics
Risks to Our Views
Source: Continuum Economics
EMEA Dynamics: Inflationary Concerns Remain High
EMEA economies continue to be squeezed by macroeconomic problems such as elevated inflation and financial pressures. We think country specific factors, geopolitics,
December 04, 2023
Moderate Increase in Turkiye’s Inflation in November
December 4, 2023 11:28 AM UTC
Figure 1: CPI (YoY, % Change) and Policy Rate (%), January 2021 – November 2023
Source: Turkish Statistical Institute, Datastream, Continuum Economics
When annual rate of changes (%) in the CPI's main groups are examined in November, we see that housing with 37.5% was the main group with the lowest
November 30, 2023
Turkish Economy Expands 5.9% in Q3 2023
November 30, 2023 1:40 PM UTC
Figure 1: GDP (%, YoY), Q3 2019 – Q3 2023
Source: Datastream, Continuum Economics
When the activities which constitute GDP are analyzed in Q3, construction sector made the highest contribution to the economy with an 8.1% YoY rise, followed by 5.7% in the industry sector and 5.1% in the financial and
November 23, 2023
Sixth Straight Rate Hike: CBRT Continued Strong Monetary Tightening
November 23, 2023 12:53 PM UTC
Figure 1: Key Rate (%), September 2020 – November 2023
Source: Datastream
The CBRT raised the policy rate from 35% to 40% on November 23 MPC meeting to establish the disinflation course as soon as possible, to anchor inflation expectations, to control the deterioration in pricing behaviour and to s
November 10, 2023
Turkiye: Macroeconomic Problems to Limit Long Term Growth
November 10, 2023 10:01 AM UTC
Figure 1: Turkiye GDP Growth Forecasts to 2030 (%)
Source: Continuum Economics/Datastream
A number of forces impact our long-term growth forecast for Turkiye.
Figure 2: Turkiye 15+ Population Forecasts to 2030 (Thousand)
Source: Continuum Economics/Datastream
Figure 3: Turkiye Capacity Utilization
November 03, 2023
Turkish Inflation Continued Its Spiking Cycle in October
November 3, 2023 8:08 AM UTC
Figure 1: Inflation (YoY, % Change), October 2018 – October 2023
Source: Turkish Statistical Institute, Datastream, Continuum Economics
When annual rate of changes (%) in the CPI’s main groups are examined in October, we see that housing with 25.9% was the main group with the lowest annual increas
October 27, 2023
CBR Maintains Strong Hawkish Stance by Lifting the Rate to 15%
October 27, 2023 1:34 PM UTC
Figure 1: $/Ruble, October 2022 - October 2023
Source: Datastream
According to the Monetary Policy press release by the CBR today, CBR remained concerned about multiple issues such as higher inflationary pressure seen across an increasingly broader range of goods and services, growing domestic dema
October 26, 2023
CBRT Continued Strong Monetary Tightening on October 26 MPC
October 26, 2023 3:35 PM UTC
Figure 1: Key Rate (%), September 2020 – October 2023
Source: Datastream
The CBRT raised the policy rate from 30% to 35% on October 26 MPC meeting to establish the disinflation course as soon as possible, to anchor inflation expectations, to control the deterioration in pricing behaviour and to s
October 19, 2023
CBRT will Likely Halt Tightening Cycle Transiently on October 26 MPC
October 19, 2023 10:52 AM UTC
Figure 1: Key Rate (%), September 2020 – September 2023
Source: Datastream
Despite inflation remained on the upside in September (there are still signs that inflation will continue to spike in the upcoming months mostly due to deterioration in pricing behaviour), cost and demand pressures and slo
October 03, 2023
Turkish Inflation Surged in September, but with a Decelerating Pace Compared to August
October 3, 2023 12:28 PM UTC
Figure 1: Inflation (YoY, % Change), October 2018 – September 2023
Source: Turkish Statistical Institute, Datastream
When annual rate of changes (%) in the CPI’s main groups are examined in September, we see that housing with 20.2% was the main group with the lowest annual increase while hotels, c
October 02, 2023
Turkiye Struggles its Way out of Current Account Deficits
October 2, 2023 8:05 AM UTC
Figure 1: Decomposition of Current Account Balance (% of GDP), 2022
Source: Turkish Statistical Institute (Turkstat), Central Bank of Republic of Turkiye (CBRT)
Figure 2: Turkish Foreign Trade (Thousand USD), January – August, 2023
Source: Turkish Statistical Institute
Turkiye has continued to recor
September 28, 2023
EMEA Outlook: Domestic Factors and Geopolitics Dominate Heading to 2024 Election Year
September 28, 2023 7:45 AM UTC
EMEA Dynamics: Domestic Factors and Geopolitics Continue to Dominate the Outlook during 2024 Election Year
EMEA economies continue to be squeezed by the elevated DM interest rates, high oil and certain food prices, EU and China slowdown. However, country specific factors and geopolitics will continue
September 21, 2023
Tightening Cycle Continues: Key Rate Hiked by 500 bps to 30%
September 21, 2023 3:21 PM UTC
Figure 1: Key Rate (%), September 2020 – September 2023
Source: Datastream
After CPI rising to 58.9% y/y in August and the outlook for inflation remaining on the upside and there are strong signs that inflation will continue to rise in the upcoming months mostly due to recent hikes in taxes and s
September 14, 2023
New Medium Term Program Sets Turkiye’s Path Towards 2024-2026
September 14, 2023 11:14 AM UTC
Enthusiastic Plans Aims to Find Solutions to Macroeconomic Issues
Inflation continues to be the core problem for the country, as we expect it to soar to 69% by the end of 2023, while the recently announced MTP is projecting it to decreasing from 65% in 2023 sharply to 8.5% in 2026. (Note: Inflation c
September 04, 2023
Turkish Inflation Continued to Surge in August
September 4, 2023 1:12 PM UTC
Figure 1: Inflation Outlook (YoY, % Change)
Source: CBRT, Turkish Statistical Institute, Datastream, Continuum Economics
When annual rate of changes (%) in the CPI’s main groups are examined in August, we see that housing with 24.9% was the main group that indicated the lowest annual increase while
August 31, 2023
Turkish GDP Expands 3.8% in Q2 2023
August 31, 2023 2:41 PM UTC
Figure 1: GDP (%, YoY), Q3 2018 – Q2 2023
Source: Datastream, Continuum Economics
When the activities which constitute GDP are analyzed in Q2, we see that the value added increased by 6.4% in services, 6.2% in construction, 5.1% in public administration, education, human health and social work activ
August 24, 2023
Strong Move by CBRT: Key Rate Hiked by 750 bps to 25%
August 24, 2023 1:00 PM UTC
Figure 1: Key Rate (%), August 2021 – August 2023
Source: Datastream
After CPI rising to 47.8% y/y in July and the outlook for inflation remaining on the upside, CBRT immediately decided to lift its inflation projection from 22.3% to 58% for 2023 in July. In addition, as there are strong signs th
August 17, 2023
Turkiye’s Path Towards the End of 2023 is Bumpy
August 17, 2023 9:54 AM UTC
Figure 1: CPI (%, YoY) and Policy Rate (%), January 2020 – July 2023
Source: Datastream
Inflation remains as the core problem which should be addressed as cost of living bites Turkish citizens. With CPI inflation coming in at 47.83% y/y in July, the outlook for inflation remains on the upside (Fi
August 16, 2023
Turkiye is Expected to Hike Key Rate to 20% on August 24 as Inflation Bites
August 16, 2023 10:12 AM UTC
Figure 1: CPI (%, YoY), January 2021 – July 2023
Source: Datastream
First, with CPI inflation coming in at 47.83% y/y in July, the outlook for inflation remains on the upside (Figure 1). We predict that inflation will continue to surge in the upcoming months mostly due to recent hikes in taxes a
August 03, 2023
Turkish Inflation Surged Drastically in July
August 3, 2023 10:10 AM UTC
Figure 1: Inflation Outlook (YoY, % Change)
Source: CBRT, Turkish Statistical Institute, Datastream, Continuum Economics
When annual rate of changes (%) in CPI’s main groups are examined in July, we see that housing with 19.3% was the main group that indicated the lowest annual increase while hotels