We ended the first quarter (Q1) of the year below expectations. Unfortunately, each year is getting stranger than the last. We entered 2022 with globally unforeseen commodity prices and tension between Russia and Ukraine, followed by a war. We are also facing inflation and cost of living issues in Turkey in addition to this. These issues dominate the domestic agenda. We are trying to adapt to this new environment on a wide scale, from the real sector to the consumer, due to prices nearly doubling from last year’s. But neither producers, intermediaries, nor consumers have been able to fully adapt. This is a very difficult process. There is a massive expansion in the number of people behind on payments for their credit cards or personal loans. Employees’ wages, which started the new year with a large increase, are once again insufficient after three months.
Inflation and the cost of living will again be at the top of the economic agenda in April. We started the month with inflation data for March. The annual inflation rate jumped to 61.1% as consumer prices climbed by 5.46% in March, according to the Turkish Statistical Institute (TurkStat). Thus, we are witnessing the highest level of inflation since 2001. We are eagerly awaiting a speech by the Central Bank Governor on April 28.
Immediately after it announces inflation, the Trade Ministry will announce provisional foreign trade data for March. We can expect that the double-digit increase in both exports and imports will continue in March. While exports increased by 21.4% in the first two months of the year, the increase in imports was 49.7%. The foreign trade deficit, which was USD 6.4bn in the same period last year, increased to USD 18.5bn this year, as the increase in imports was much higher than exports. The current momentum is likely to continue over the next few months. We will wrap up the week with the market participants survey to be announced on Friday morning.
On the other hand, Borsa Istanbul’s BIST 100 Index surged by 20.22% to 2,233.30 points in Q1 despite hawkish global central bank trends and the Russia-Ukraine war. The figure is at its strongest performance since Q1 2012. Moreover, new records may be broken in the short term, according to analysts. As they say, one of the main factors behind the surge was that the financial statements of the companies listed on the stock exchange for the Q4 met expectations. They also added that the BIST 100 Index is still attractive as it continues to grow despite it being at a historic-low in USD terms. 82% of the companies listed on the BIST 100 appreciated while 17% of them depreciated in Q1.
The annual inflation rate jumped to 61.1% as consumer prices climbed by 5.46% in March, according to TurkStat.
The domestic producer price index (D-PPI) increased by 114.97% in March, year-over-year, according to TurkStat. The D-PPI rose by 9.19% on a monthly basis.
Trade Minister Mehmet Mus will announce preliminary foreign trade figures for March (11.30 am).
Treasury and Finance Minister Nureddin Nebati will attend the consultation and evaluation meeting hosted by the Bursa Chamber of Commerce and Industry (12.30 pm).
The Central Bank will release the net FX position of non-financial companies for January (2.30 pm).
IN OUR MAGAZINE THIS WEEK:
>> On the cover: Lenovo Data Center Group (DCG) Europe, Middle East, and Africa (EMEA) President Giovanni Di Filippo is on our cover this week. Lenovo and SAP have joined forces to make technology investment easier for the business world. Lenovo’s everything-as-a-service solution TruScale, which runs on SAP’s software-as-a-service system S/4 HANA Cloud, is ready for installation after 12 months of cooperative work. The first global installation of TruScale took place in Turkey last week. “This is just the beginning since the platform can be utilized for many other things in the future,” said Filippo. You can read the details on pages 8-9.
>> Professor Ilter Turan: Being cautious is better than being unduly optimistic. P. 10.
>> Q&A: Kutlu Karavelioglu, Chairman of the Machinery Exporters’ Association (MAIB). P. 11.
>> Chief Economist Gunduz Findikcioglu: After the deluge. Pp. 12-13.
>> Zeynep Gurcanli: ‘Zeitenwende’. P. 14.
>> Don’t forget to take a glance at our printed issue prepared for April!