We start this week with the May results for the sectoral confidence indices. The consumer confidence index announced last Friday morning was 67.6. While consumer confidence is at historically low levels, it continues to show positive signs on the sector side. However, the gradually widening difference between these two is not sustainable in the long term. That’s why the data announced today is important. The real sector confidence index dropped by 0.3 points to 109.4 month-over-month in May, according to the Central Bank. In the meantime, the confidence index increased by 6.1% in the services sector, 1.7% in the retail trade sector, and it declined by 2.2% in the construction sector in the same period, according to the Turkish Statistical Institute (TurkStat).
Today, the Cabinet convenes with President Recep Tayyip Erdogan. Among the main agenda items for the meeting will be Turkey’s concerns over Sweden and Finland’s applications for NATO membership, internal and external security issues regarding the Russia-Ukraine war, possible regulation on personal rights of retirees and public employees, extortion in rental prices, and inflation.
The Fed minutes to be released on Wednesday night will determine the direction of money and capital markets in the coming days. After the collapse in the crypto markets and the decline in the stock market indices, the possibility of more moderate statements from the Fed in the coming days is increasing. Therefore, a comfortable period may be coming in foreign markets. It’s unknown to what extent this will to Turkey.
Undoubtedly, the most critical development of the week is the interest rate decision, which will be announced on Thursday. No interest rate change is expected from the Central Bank’s Monetary Policy Committee (PPK). Turkey has been witnessing its highest inflation since 2001, the highest CDS premiums, and a serious increase in the cost of living, with negative real deposit rates and negative real loan rates for nearly eight months.
On Friday morning, the Union of Chambers and Commodity Exchanges of Turkey (TOBB) will announce the number of new companies established in April. The number of companies established in the first quarter of the year exceeded 32,000, the most companies ever established. There is a direct relationship between new company establishment and non-farm employment. For this reason, new companies are expected to have positive affects on employment. A positive impact on the employment market may also be experienced in the coming months when refugees residing in Turkey return to their homeland.
DAILY AGENDA
The real sector confidence index dropped by 0.3 points to 109.4 month-over-month in May, according to the Central Bank.
The seasonally-adjusted confidence index surged by 6.1% in the services sector, 1.7% in the retail trade sector, and it declined by 2.2% in the construction sector in May, compared to the previous month, according to TurkStat.
The Capacity Utilization Rate (CUR) in the manufacturing industry rose by 0.2 points to 78.0% in May, month over month, according to the Central Bank.
The Agricultural Input Price Index (Agriculture-IPI) jumped 105.70% in March, compared to the same month last year, according to TurkStat. Agricultulture-IPI surged by 15.16% on a monthly basis.
The short-term external debt stock climbed by 9.9% to USD 132.3bn in March, compared to the end of 2021, according to the Central Bank.
The year-end inflation expectation rose from %46.44 to 57.92% for 2022 in May compared to the previous month, according to the Central Bank’s Survey of Market Participants.
The Ministry of Culture and Tourism will release foreign tourist figures for April (11.00 a.m.).
The Central Bank will release Residential Property Price Index for March (2.30 p.m.).
The Cabinet will convene with President Recep Tayyip Erdogan (3.00 p.m.).
IN OUR MAGAZINE THIS WEEK:
>> On the cover: Tempo BPO, the business process outsourcing company, discovered a new paradigm that would transform the business of the future and followed a rocky path to adapt itself. Tempo BPO CEO Cemal Akar is leading the change in his own company and is now committed to helping transform companies into digital structures compliant with the new economy and paradigm. You can read the details on pages 8-9.
>> Professor Ilter Turan: Quiet diplomacy might have been better, but complaints need to be addressed. P. 10.
>> Q&A: Yuksel Yilmaz, Group President of Energy Companies at OYAK Group. P 11.
>> Chief Economist Gunduz Findikcioglu: Can the incumbent bloc win again? You can read the details on pages 12-13.
>> Our Foreign Policy Columnist Zeynep Gurcanli addresses if the NATO strategy could backfire on page 14.
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