This week, following the Federal Reserve‘a decision to raise interest rates by a record amount, the Monetary Policy Committee (PPK) will meet to set the policy rate on Thursday. Although no one expects a change, many people are hoping for it However, it is too early to expect a rate change by the PPK. It is not reasonable to have such an expectation, especially after the statements made by President Recep Tayyip Erdogan last week. Therefore, it seems that we will continue with the current policy rate.
The point to note here is that as inflation rises, the need for an interest rate hike increases. Now, as long as the economies that fund the world, especially the U.S., increase their own interest rates, the need for countries like ours to increase their own interest rates will intensify. On top of all this, Credit Default Swap (CDS) is at record levels.
Regarding the economic data, the Turkish Statistical Institute (TurkStat) will release the Consumer confidence index and sectoral confidence indices for June on Wednesday and Friday, respectively. Apart from the PPK’s decision, the Central Bank will announce the real sector confidence index and the capacity utilization rate for June on Friday.
This week will also be busy for the Parliament. The body will continue to discuss the legislative proposal on the law for the Istanbul Finance Center. The Parliament is also expected to examine the Judges and Prosecutors Law, which includes the regulation regarding the 6th Judicial Package, and a legislative proposal for amendment of a range of laws. Moreover, the discussion of the Press Law, which contains regulations about print, social media, and internet journalism, and a legislative proposal for amendment of some laws will be on the Parliament’s agenda this week.
In the meantime, the State-owned Enterprises Commission will audit the 2019-2020 accounts of the General Directorate of State Airports Authority (DHMI), the General Directorate of Mechanical and Chemical Industry Corporations (MKE), the Military Factory and Shipyard Management Inc. (ASFAT AS) on Tuesday, the General Directorate of Turkish Grain Board (TMO), and the Directorate of Ataturk Forest Farm on Wednesday, and the General Directorate of Turkish State Railways (TCDD) and its subsidiaries on Thursday.
Moreover, political parties will organize group meetings in Parliament this week.
The net international investment position (IIP) posted a USD 236.8bn deficit in April, according to the Central Bank.
The Agricultural Input Price Index (Agriculture-IPI) jumped 117.31% in April, compared to the same month last year, according to TurkStat. Agriculture-IPI rose by 7.45% on a monthly basis.
The non-domestic producer price index (ND-PPI) soared 100.54% in May, year-over-year, according to TurkStat. The ND-PPI increased by 6.51% in May month-over-month.
The Culture and Tourism Ministry will release foreign tourist figures for May (11.00 a.m.).
The Treasury and Finance Ministry will announce the central government’s domestic and external debt figures for May (5.30 p.m.).
IN OUR MAGAZINE THIS WEEK:
>> On the cover: George Janjgava, Georgian Ambassador to Ankara, is on our cover this week. Georgia is stepping up bilateral trade with Turkey, its number one trade partner. “The growth trend in bilateral trade over the past few years gives hope that the trade turnover will reach USD 3bn and may even exceed it,” said Janjgava. You can read more on pages 8-9.
>> Professor Ilter Turan says on page 10 that ‘Turkey and Sweden must agree on differences’.
>> Report: The Turkish Industrialists’ and Businessmen’s Association (TUSIAD) held a High Advisory Council (YIK) meeting where the organization criticized the government’s economic policies. President Recep Tayyip Erdogan responded to statements made at the meeting saying that TUSIAD should never ‘knock on the door’ of the government if it continues with these critiques. You can read the details on page 11 under the title ‘TUSIAD versus Erdogan’.
>> Chief Economist Gunduz Findikcioglu: Twin deficit. Pp. 12-13.
>> Business by Law: The place of decentralized autonomous organizations. P. 14.
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