From growth for 2021 to inflation and exports, Turkey will have a busy economic agenda this week with several crucial data announcementstandis that a new the energy tariff is due to kick in to relieve households and businesses reeling from rising electricity bills.
The eyes go also to be on developments in Ukraine in the middle of Russia invasion of son southern neighbour, given Turkey’s close ties in tradeenergy and tourism.
Data on Monday is likely to show than Turkey economy registered double-figure growth in 2021 after rebounding strongly from the coronavirus pandemic.
Surveys expect gross domestic product (GDP) to have increased by around 9% in the fourth quarter and about 11% in the totality year.
Yet the economy gets cold off this year due to soaring inflation and recent volatility in the Turkish lira.
Turkey was one of the little countries to expand in 2020, thanks in large part to cheap loans following a series of rate cuts by the central bank abstain off economic impact of the pandemic.
Growth picked up pace again in 2021 as COVID-19 restrictions have been largely lifted. But a falling currency at the end of the year disturbed growth expectations for this year.
double digit growth
The median estimate in a Reuters poll of 25 economists for GDP 2021 growth was 11%, with forecasts between 6% and 11.8%. The Reuters poll put growth in the fourth quarter at 9%, according to the median estimate of 13 economists, in a range of 6.3% and 11.9%.
An Anadolu Agency (AA) investigation finds that growth at 8.7% in the last three-month period and 11.1% for the totality year.
the government at also to put forward believes that the economy would like record double-figure growth in 2021, higher than its previous forecasts of 9%.
GDP growth in 2022 should be 3.5%, based on on the median estimate of 23 economists in the Reuters poll. Forecasts ranged from 0.8% to 5.2%.
Growth was 7.4% in the third quarter of 2021, and a whopping 22% in the second quarter mainly due to the so-called base effect created by the pandemic-related slowdown in 2020.
Inflation Reading
The economic boom in 2021 has been clouded by double-digital inflation, which soared after the Central Bank of The Republic of Turkey (CBRT) started cutting son policy rate in September.
inflation data for February is planned on Thursday after the consumer price index (CPI) rose to 20-year high of nearly 49% in January.
The lira has been broadly stable since start of the year following 44% decline in 2021 and hovered just below 14 against the United States dollar before briefly exceeding the level on risks in the middle of Russia military intervention in Ukraine.
Authorities are pursuing a new economic policy of low interest rates to boost credit, exports and investment, saying it would be help the country weather inflation.
President Recep Tayyip Erdogan says the policy will also ultimately help Turkey solve it’s chronic current account deficit problem and help stabilize lira.
Readjusted energy tariffs
Erdoğan said that government would introduce a set of measures to bring some relief for households and businesses reeling from the outbreak power invoices, including the readjustment of the level below which higher electricity tariffs for households using more energy kick in.
Households and businesses have been hit with sharp hikes in energy prices after authorities increased electricity tariffs on January 1, soaring prices of more more than 50 % for numerous homes and up to 127% for businesses and high-consumption households.
The authorities readjust the level below which higher electricity tariffs for households using more energy kick in. The adjusted tariffs should come into force effect like of Tuesday.
Civil society organizations will no longer pay higher the energy tariffs that apply to businesses and certain small businesses go also to be able to benefit from adjusted rates.
Erdoğan said that some 4 millions of homes in the country of more over 84 millions people would receive state subsidies for help with high natural gas and electricity bills.
“We continue to support households in electricity and natural gas. We listen to the voice of our nation and find solutions to their problem“, said the president on February 16.
He reiterated that high inflation was “temporary” and that son government would put him under control.
“Our most important problem is high inflation. Hope we get over it and see it go down month after month,” Erdoğan said.
Prices have soared due to dependence on Turkey on imports of energy, raw materials and many supplies.
Earlier this month, the government lower the value-added tax (VAT) on basic food supplies at 1% versus 8%.
Incoming business data
Trade Minister Mehmet Muş will announce on Wednesday the first trade Data for February.
Turkey made a float start to 2022 while its exports hit an all-time high monthly in January, up 17.6% year-over-year at $17.6 billion.
But the country trade the deficit jumped on the back of energy imports which have almost quadrupled compared to year since.
The shortfall jumped 240.7% year-over-year in January to $10.44 billion, after imports soared 55.2% to $28 billion due to surprisingly harsh winter conditions and rising energy price.
The country’s exports reached a record $225.4 billion last year, with a target of $250 billion and $300 billion set for 2022 and 2023, respectively.
CPM meeting
Among other things, unemployment data for January is due March 10. The unemployed rate has been down 0.1 percentage point from the previous month to 11.2% in December, the latest the data showed.
One day later, eyes will be on indices of turnover, retail sales and industrial production.
The Central Bank of The Republic of Turkey (CBRT) will hold its third meeting of the Monetary Policy Committee (MPC) of the year on The 17th of March.
For support the government is new central drivele bank had brought down the reference policy rate per 500 points since September at 14% but interrupted the easing cycle in January and kept the one- rest week rate unchanged this month again.
Russia-Ukraine conflict
Turkey is facing a difficult balancing act in the Ukraine-Russia conflict as it has good ties with both countries and stalemate carries risks, car its Black Sea neighbors are also among its main economic partners.
The conflict is likely to harm Turkey’s economy given the son deep energy, defense and trade relations, while the two markets are crucial sources of tourism.
the current risk has the potential to negatively affect the inflationary balances of the country, car he adds concerns about energy import costs.
Oil prices have reached their highest since 2014 after Moscow sent troops to Ukraine, adding to supply problems that pushed prices above $100 a barrel.
Russian natural gas made up about 45% of Turkish gas purchases dependent on imports last yearwhich hit a record level as result of drought and a related rise in gas power production.
Turkey also imports crude oil from Russia, with annual amounts varying between 10% and one-the third of its crude imports.
Ankara seeks shorter gas deals with Moscow to alleviate import costs.
