What matters on Monday, March 28

We have now entered the second month of the Russia-Ukraine War. President Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin held a phone call to discuss recent developments and the negotiation process to end the conflict. The Turkish and Russian leaders agreed that next meeting of Russian and Ukrainian negotiating teams will be held in Istanbul, according to a statement from the Directorate of Communications. No dates were given for the meeting.

Numerous analyses and predictions have been made about the short-term effects of the war on Turkey. We have seen the suffering of many people and hope these days will end quickly. Both countries involved in the war are partners with whom Turkey has good political relations and strong economic and commercial ties. Therefore, the war has done direct and indirect damage to both Turkey’s foreign trade and production. There are signs that some companies may move their management units and some production facilities to Turkey in the aftermath of the war. In addition, some retail brands, from ready-to-wear, to shoes, to furniture, and cosmetics, have attempted to transfer their Ukrainian and Russian stores Turkish investors at affordable prices.

This week’s data agenda is extremely light. The most important indicator will be the Purchasing Managers Index (PMI) for March, which will be announced on Friday morning. The PMI has been achieving positive values close to 50 in recent months. There is no homogeneous movement in the sub-indicators that make up the index. There is liveliness, especially in the chemical and ready-made clothing sectors but other sectors are weak. There has been a decline in Turkey’s exports and export orders to Russia and Ukraine due to the war and this is likely to pull the data down. We’ll find out how big of an impact there has been on Friday morning.

The Turkish Statistical Institute (TurkStat) will announce foreign trade data for February on Friday morning, as well. Provisional data indicated that exports increased by 25.4% and imports by 45.6% in February. We will see similar figures on Friday. We will see the effect of the war on trade in the March data. Our total monthly exports to the two warring countries is near USD 700m (Russia USD 500m, Ukraine USD 200m). Sales to Ukraine have practically stopped and there are reports that there is a decrease in the Russian market by half. Therefore, we will see a decrease of around USD 400-450m on a monthly basis. This is not a big enough effect to turn the export increase into a decrease. However, we will enter a more moderate period in terms of export growth.


Marketable lignite production rose by 21.3% to 6.66 million tons while marketable hard coal production surged by 5.8% to 101,632 tons in January compared to the same month last year, according to TurkStat.

The Cabinet will convene under the presidency of President Recep Tayyip Erdogan to discuss current issues, including the Russia-Ukraine war (3.00 pm). President Erdogan will hold a press conference following the meeting (7.00 pm).


>> On the cover: Kutay Kartallioglu, CEO of CarrefourSA, the joint venture of Sabanci Holding and the France-based international supermarket chain Carrefour, is on our cover this week. CarrefourSA has built its new growth strategy on tradesmen. “Instead of opening thousands of CarrefourSA stores all over Anatolia, we encourage tradesmen to open up their own stores under the Carrefour brand and use our private label products and know-how. We train them, for example, in our fish and butcher department standards,” Kartallioglu said, stressing that the supermarket chain is expanding this practice into a company-wide growth strategy. You can read more on pages 8-9.

>> Professor Ilter Turan examines ‘Russia’s nuclear threat’ on page 10.

>> Q&A: Vedat Bilgin, Minister of Labor and Social Security. P. 11.

>> Chief Economist Gunduz Findikcioglu: Capitalism works but not this way. Pp. 12-13.

>> Our Foreign Policy Columnist Zeynep Gurcanli analyses ‘Ukrainian aftershocks’. You can read more on page 14.

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