We kicked of the week with June inflation data. Annual inflation reached 78.62%, according to the Turkish Statistical Institute (TurkStat).
The partial decline in the foreign exchange rate in the last week of the month has not yet been reflected in prices. However, we are in a short-term period of decline in commodity prices, and if this continues for several months, it may cause partial relief. However, due to the price hikes in the last month, we again saw a high inflation outlook.
Although the reduction in fuel prices due to the decline in oil prices in the second half of the month will slow the pace of the Consumer Price Index, we saw an increase of 4.95% on a monthly basis.
Inflation continues to rise in the U.S. and the EU, and this has caused central banks to start raising interest rates faster and with larger steps than expected. For this reason, the worry of high inflation in recent months has started to be replaced by recession concerns.
Turkey has removed income and stamp taxes levied on all paid employees to an amount up to the minimum wage since the beginning of the year, thereby waiving a tax revenue of TRY 57.8bn, according to the Treasury and Finance Ministry. It also said the cost stemmed from tax exemption rose by TRY 32.8 to TRY 90.6bn after the minimum wage that will take effect in July was increased to TRY 5,500 in net terms.
On the foreign policy side, Turkey and Armenia agreed at the fourth normalization meeting in Vienna, the capital of Austria, to open the land border for third-country citizens visiting both countries as soon as possible, according to the Foreign Ministry. The countries also agreed on commencing direct air cargo trade between them at the earliest possible date and decided to initiate the necessary process to that effect. The Turkish and Armenian officials also “discussed other possible concrete steps that can be undertaken towards achieving the ultimate goal of full normalization between their respective countries. “They also reemphasized their agreement to continue the normalization process without preconditions,” the statement said.
Swedish Prime Minister Magdalena Andersson vowed to abide by the recent agreement with Turkey, including pledges her country would extradite terrorists. Andersson said those who are not involved in terrorist activities need not worry. “Swedish citizens cannot be extradited according to national and international law. If you have not participated in terrorist activities, you do not need to worry,” she added.
Annual inflation reached 78.62% and the monthly inflation rose by 4.95% in June, according to TurkStat.
The domestic producer price index (D-PPI) jumped 138.31% in June, compared to the samemonth last year, according to TurkStat. The PPI surged by 6.77% on a monthly basis.
IN OUR MAGAZINE THIS WEEK
>> On the cover: Dr. Do Son Hai, Ambassador of the Socialist Republic of Vietnam is on our cover this week. Do told TR MONITOR during his trip to Istanbul aimed at increasing bilateral trade and economic relations that Turkey is the country with the highest investment in Vietnam of all Middle East countries. “Mutual, bilateral interest will help Turkish and Vietnamese businesses to see the opportunities in each country’s region,” the Ambassador added. You can read the details on pages 8-9.
>> Professor Ilter Turan: Let’s wait and see how it goes. P. 10.
>> Q&A: Ali Emre Balli, Chairman of the Board of Directors of the Association of Financial Institutions (FKB). P. 11.
>> Our Chief Economist Gunduz Findikcioglu examines ‘international competitiveness’ on pages 12-13.
>> Our Foreign Policy Columnist Zeynep Gurcanli addresses who prevails after the veto issue on page 14.
>> Turkey’s exports soared 18.5% to USD 23.4bn, while its imports jumped 39.6% to USD 31.6bn in June, compared to the same month last year, according to Trade Minister Mehmet Mus.
>> The Istanbul Wage Earners Cost of Living Index (WECLI), which indicates the movement of retail prices in Istanbul, rose by 4.03% in June, compared to the previous month, according to the Istanbul Chamber of Commerce (ITO). The Wholesale Price Index, which reflects wholesale prices in the city, increased by 8.17% in the same period. The Istanbul WECLI jumped 94.19% and the Wholesale Price Index soared 87.98% in June, year over year
>> The net sales revenues of companies operating in the communication sector surged by 21% to TRY 25.5bn in the first quarter, compared to the same period of the previous year, according to a report prepared by the Information and Communication Technologies Authority (BTK).