What matters on Monday, December 6

We will begin the week with the announcement of the real exchange rate data for November. The real effective exchange rate, which few paid attentions to, is not followed closely due to the plummeting lira. The index, announced monthly since 1994, dropped to its lowest-ever level of 60.37 in October. We will observe a lower level in November. The real effective exchange rate shows us the change in the value of TRY against other currencies, excluding the effects of inflation. The index value should be around 100, in the long term. The current index points to a 40% discounted value against major currencies even after excluding the effects of inflation.

October’s construction cost index will be announced on Friday. The index showed an increase of 39.5% in September from the same month last year. Construction costs have tripled since the beginning of 2015. The Turkish Statistical Institute generally lists construction costs under two categories, building materials and labor. The increase in the cost of building materials stood at 47.4%, whilst labor costs were up by 22.3% in September. The increase in the cost of construction showed a record increase of 44.8% in July and it fell to 42.1% in August. We will observe another high increase this month.

Unemployment is a chronic disease that plagues our economy, but unemployment data hardly expresses the truth of the matter. It’s hard to say that economists closely follow this data due to the difficulty in explaining the drastic changes in the figures and the ambiguity of the broader picture. The latest data shows that the narrowly-defined (classical) unemployment in September was 11.5% and the broader unemployment stood at 21.9%. October is generally known as a month that unemployment begins to increase. We will be able to see how it has changed on Friday morning.

In the meantime, the international credit rating agency Fitch Ratings has revised the Outlook on Turkey’s Long-Term Issuer Default Ratings (IDRs) from Stable to Negative last week. IDRs were affirmed at ‘BB-‘. Speaking about the downgrade, Fitch Analyst Erich Arispe said intervention in the Central Bank’s decision has decreased reliability.


The Central Bank will release the monthly price developments report for November.

The Central Bank will announce the Real Effective Exchange Rate for November (2.30 pm).

The legislative proposal on the central government’s 2022 budget will be discussed at the Parliament. Vice President Fuat Oktay will submit the 2022 budget.


>> On the cover: For our cover, our Executive Editor Husniye Gungor conducted an interview with the The Portuguese Investment and Foreign Trade Agency (AICEP Portugal Global) Chairman & CEO Luis Filipe de Castro Henriques on mutual trade relations between Portugal and Turkey. A USD 5bn bilateral trade volume target can be reached with Portugal given that Turkish investments in the country have more than doubled in the last four years, Henriques says. You can read the details on pages 14 and 15.

>> Professor Ilter Turan: Turkish mediation steps may be in the right direction but will not yield results. P. 10.

>> Q&A: Dr. Mustafa Tan, Chairman of the Board of Directors of the National Olive and Olive Oil Council (UZZK), Member of the Advisory Committee of the International Oil Council, Founder of Dr. Tan. P. 11.

>> How will the network of charging stations be set up? Our Energy Columnist Mehmet Kara answers to this question on pages 12-13.

>> Startup: E-finance company takes a global step into the UK market. P. 16.

>> Tourism: The future of the tourism industry: ‘Able Tourism’. You can read the details on page 18.

>> Our Foreign Policy Columnist Zeynep Gurcanli looks into the new era in Germany and how Turkey will be affected on page 19.

>> You can begin to understand the basics of Turkish economy and the mental infrastructure of economic actors by reading our Chief Economist Gunduz Findikcioglu’s piece this week. He deconstructs the mental structure that shapes economic decisions. You will enjoy reading his “Mental constructs and the art of ‘governing the commons’” piece on pages 20-21.

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