What matters on Monday, April 25

We’ve started the week with sectoral confidence indices. The seasonally adjusted confidence index surged by 3.0% in the services sector, 2.9% in the retail trade sector and 3.0% in the construction sector, while the Real Sector Confidence Index surged by 1.2 points to 109.7 in April, compared to last month.

There has been a divergence between consumer confidence and sectoral confidence (producer) indices in the country for some time. While consumer confidence trends downward, confidence in producer sectors is strong. One of the reasons for this is that exports are performing well. However, the continued increase in exports does not explain the relatively strong courses for the services, retail, and construction sectors. This leads us to the second factor, which is credit growth. Although consumer confidence is very low, one of the reasons why confidence has not declined on the production side is that consumers are spending more using credit. However, we do not expect this divergence between consumer and producer confidence to last long. The probability of weakening in sectoral confidence indices in the coming months is increasing.

The Inflation Report, which will be released on Thursday, will set the economic headlines for Friday morning. The phrase, “The main aim of the Central Bank is to ensure price stability,” is written right next to the logo on the Central Bank website. The explanation under the heading, “Inflation Targets in Monetary Policy,” is as follows: “Achieving inflation targets is a very important factor in the management of monetary policies. To achieve this goal, the Central Bank manages aggregate demand and inflation expectations by using policy rates and other monetary policy tools. Inflation forecasts published by the Central Bank in the inflation targeting regime are also an important tool for guiding inflation expectations. The Central Bank’s inflation forecasts were explained with the Inflation Reports published in January, April, July, and October.” However, the Bank seems to be feeding inflation with the steps it has taken rather than fighting against inflation. For this reason, we will need to closely observe what the Central Bank will say in its report on inflation, which the government itself aggravated with its policies last autumn.

Regarding the other agenda items in the country, the Cabinet is expected to convene under the presidency of President Recep Tayyip Erdogan today. The meeting will focus on Turkey’s domestic and foreign agenda as well as economic developments in the country. The Cabinet is also expected to discuss the latest operation by the Turkish Armed Forces (TSK) in Northern Iraq and the recent developments in the Russia-Ukraine war. Moreover, the Cabinet is expected to evaluate increasing the Ramadan Holiday to nine days.

Moreover, the Parliament will discuss the resolution to open a Parliamentary survey about the problems of the elderly Turkish population and the report by the Parliamentary Musilage Investigation Commission. In the meantime, political parties will hold their group meetings in Parliament during the week.

President Recep Tayyip Erdogan will also receive UN Secretary-General Antonio Guterres in Ankara on April 25. “The Secretary-General will visit Ankara, Turkey, where, on 25 April, he will be received by President Recep Tayyip Erdogan,” the Office of the spokesperson for the UN Secretary-General said in a statement. The office announced Friday that Guterres will visit Moscow on April 26 and Kyiv on April 28.


The Real Sector Confidence Index surged by 1.2 points to 109.7 in April, compared to the previous month, according to the Central Bank.

The seasonally adjusted confidence index surged by 3.0% in the services sector, 2.9% in the retail trade sector and 3.0% in the construction sector in April, as compared to March, according to the Turkish Statistical Institute (TurkStat).

The Capacity Utilization rate rose by 0.5 points to 77.8% month-over-month in April, according to the Central Bank.

President Recep Tayyip Erdogan receives UN Secretary-General Antonio Guterres (3.30 pm).


>> On the cover: Turkey’s leading fuel, LPG distribution, lubrication, and chemicals company Petrol Ofisi is considering producing special-purpose industrial oil with Chevron. Having established a joint company with Chevron in 2020 September, Petrol Ofisi has been producing Chevron lubricant for petrol and diesel motors since November 2021 in its Derince facility. The company will start manufacturing Chevron’s special purpose industrial oils, such as the one used in wind turbines, if consumption increases, according to Selim Siper, Petrol Ofisi CEO. “There are only three companies that produce this in the world. We brought those products to the market. If the tonnage increases, we will start manufacturing them,” Siper said. You can read the details on pages 8-9.

>> Professor Ilter Turan: Being careful in defending the freedom of expression. P. 10.

>> Q&A: Orhan Turan, President of the Turkish Industry and Business Association (TUSIAD). P. 11.

>> Chief Economist Gunduz Findikcioglu: Credit boom in a high and sticky inflation environment. You can read the details on pages 12-13.

>> Zeynep Gurcanli: Claw Lock, a multi-pronged operation. P. 14.

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