What matters on Monday, April 11

We are kicking off a busy week in terms of economic data. The Industrial Production Index, retail, turnover, and foreign trade indices for February as well as house sales figures for March will be just some of the data released this week.

The first piece of data announced was the balance of payments figures for February. The current account balance posted USD 5.15bn deficit in February, according to the Central Bank. The current account deficit (CAD) reached its highest level in the last 50 months, reaching USD 7. 1bn in January. However, foreign trade data points to a deficit of USD 6bn in March. That’s why we may see the biggest first-quarter deficit since 2011 when the data is fully released.

The Construction Cost Index (CCI) was the second piece of data announced today. The CCI annually surged by 90.27% in February, according to the Turkish Statistical Institute (TurkStat). From 2020 onwards, the rise in cost accelerated, and from 2021 it grew abnormal. Construction costs have increased by 4.6 times since 2015. The CCI is expected to exceed the 500-point limit in March.

One of the critical agenda items of the week is the policy rate decision to be made by the Central Bank’s Monetary Policy Committee (PPK), which will be announced on Thursday at 2.00 PM. Interest rates will likely remain steady this month. The probability of an interest rate increase by the PPK is lower than the probability of a meteor falling that day, following the words of Treasury and Finance Minister Nurettin Nebati last week, summarized as “We have overcome the exchange rate and interest rate, it’s time for inflation.” The gap between inflation and interest rates continues to widen and this trend will continue in the near term. The widening of the gap means that the negative real interest rate will grow further and the pressure on the exchange rate will increase. Although there is no official statement of intervention, there is a sense that there are measures being taken so that USD/TRY does not exceed 15.00. We’ll see how long these efforts will continue as negative real interest rates continue to grow.

The Parliament, which will start its weekly work on April 12, also has a busy agenda this week. The Parliament will discuss the legislative proposal for Sports Clubs and Sports Federations prepared jointly by the AK Party and the National Movement Party (MHP). The Parliament’s Justice Commission will convene on Wednesday to discuss the legislative proposal for amendment of the Attorney’s Act. In the meantime, political parties will hold their group meetings in Parliament during the week.


The current account deficit posted a USD 5.15bn deficit in February, according to the Central Bank. The 12-month rolling CAD amounted to USD 21.84bn in the same period.

The Construction Cost Index (CCI) jumped 90.27% in February year-over-year, according to TurkStat. The CCI rose by 5.73% in February on a monthly basis.

The unemployment rate dropped by 0.5 points to 10.7% in February month-over-month, according to TurkStat.

Treasury and Finance Minister Nureddin Nebati will convene with the business community in Mardin (1.00 pm).


>> On the cover: Nurtac Ziyal Afridi, CEO of the Turkish-Belgian chocolate maker GODIVA is on our cover this week. Godiva achieved significant growth with its ‘gold plan’, which is projected to double its business size and carry the brand to leadership in priority markets. “We also aim to carry our brand into other categories related to chocolate,” Afridi says. You can read more on pages 8-9.

>> Professor Ilter Turan: Rebuilding the American relationship will not be easy. P. 10.

>> Q&A: Stephane Crouzat, Climate Ambassador from France. P. 11.

>> Our Chief Economist Gunduz Findikcioglu addresses inflationary surprises on pages 12-13.

>> The sanctions regime placed on Russia will have impacts on businesses of Turkish origin. You can read more details in our Business by Law section on page 14.

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