What matters on Monday, February 7

This week will be calm in terms of data.  Foreign trade indices for December 2021 will be released on Thursday morning. Although these have no effect on daily life, we’ll learn how our exports and imports changed on both price and volume bases in 2021. This will be important in terms of comparing our foreign trade performance with other countries, as well as understanding how much of the rise in prices stems from the global price hike and how much of the rise in prices stems from volume increase. 

December results of the Construction Cost Index will be released at the same time. We have observed a sharp increase in construction costs throughout the year, especially since the summer. The majority of this stemmed from the FX rate hike, and part of it arose from the raw material price surge. The index climbed by 48.9% in November. We’ll also see an increase in December. But the real jump will be in the January data.

The December labor force statistics will also be announced on Thursday morning. We don’t estimate a deterioration in the labor market under normal conditions. There are two reasons for this. First, industrial production boosts employment due to the export and domestic market potential. The employment index in terms of PMI data has been positive for 20 months. Second, the confidence index in retail, services, and construction sectors hasn’t deteriorated. That’s why the possibility of a decline in the data seems low excluding seasonal impacts. 

The data for the balance of payments will be released on Friday morning. Thus, we’ll see how we finished 2021. There have been positive signals in the current account balance in recent months. However, we need to make sure to consider these signals a temporary change and not to see recovery in the current account balance as a structural transformation. These signals didn’t come from an economy that is on a normal course but rather from an economy whose currency unit devaluated by 50% in four months.

We’ll end the week with the Industrial Production Index and Retail and Turnover indices for December, which will be released by the Turkish Statistical Institute (TurkStat). We expect all indices to maintain their positive course. However, it is worth considering that the January PMI, which was released last week, indicates a contraction across all sectors. This will reveal itself in the industrial production index.


The Ministry of Treasury and Finance will release cash realization figures for January. (5.30 pm)


>> On the cover: French Ambassador to Ankara Hervé Magro is on our cover this week. France is ready to engage with Turkey in a gradual, proportionate, and revocable manner in several areas of common interest, subject to established conditions, according to Magro. Hinting at the policies that France will pursue during the European Union Presidency it has assumed since January 1, he stated that they will seek ambitious reconciliation during their presidency. You can read more on pages 8-9.

>> Professor Ilter Turan: It will be difficult to address the Russian challenge. P. 10.

>> Q&A: Piotr Matys, Strategist at InTouch Capital Markets. P. 11.

>> Our Chief Economist Gunduz Findikcioglu examines if there is a way out of the economic impasse in Turkey on pages 12-13.

>> Our Foreign Policy Columnist Zeynep Gurcanli analyses the rise of Qatar and Turkey’s role at the international arena. You can read more on page 14.

>> This week you’ll also have a special printed issue in your physical mailboxes that includes in-depth analysis of the economy, employing a 360-degree point of view. As we announced at the beginning of the year, our monthly special issue will be delivered to you at the start of each month.

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