This week, all eyes will be on the balance of payments statistics to be announced Tuesday. The movements in energy and commodity prices continue to affect the current account balance. The foreign trade deficit in August broke a record with USD 11.2bn. The current account deficit (CAD) will inevitably be high in the balance of payments data for August. The CAD, which was USD 36.7bn in the first seven months of the year, is expected to increase by around USD 5bn in August. For the deficit to narrow, the increase in imports (currently exceeding 40%) should slow down and exports should accelerate in turn. However, exports will continue to slow down in the coming months. The only way, in this case, is for imports to slow down due to the decline in commodity prices; but there are no signs of such a development any time soon.
Another important piece of data this week will be the industrial production index. It is among the most important components of growth. In other words, how much the economy will grow is largely determined by the change in industrial production. Industrial production is driven by domestic demand and external demand conditions. Signals of a slowdown in both domestic and foreign demand have been getting stronger in recent months. Electricity consumption, PMI, the real sector confidence index in the country, global PMI indicators, and the export climate index created from this have turned downwards. In July, industrial production showed its weakest growth since the beginning of COVID-19. We’ll learn the August results of industrial production on Wednesday morning.
This week, the Turkish Statistical Institute (TurkStat) will also release foreign trade indices and construction cost index for August on Tuesday morning, retail sales indices for August on Wednesday morning, and house sales for September on Friday morning.
Regarding internal affairs, the Cabinet is expected to convene under the presidency of President Recep Tayyip Erdogan today. The constitutional change draft on the headscarf will be presented to President Erdogan. Following the Republican People’s Party’s (CHP) proposal to provide legal assurance on the headscarf issue, President Erdogan called for a constitutional amendment on the headscarf and instructed the Ministry of Justice to carry out studies on this. Erdogan is expected to announce the amendment to the constitution to protect the headscarf and the family after the cabinet meeting. President Erdogan is also expected to announce the status of land and office applications for the TOKI social housing project, which have started as of today.
Discussions on the Press Law and the Law Amending Certain Laws, of which 14 articles were accepted, will continue on Tuesday at the Parliament.
In the meantime, President Recep Tayyip Erdogan Erdogan will be in Kazakhstan on Wednesday and Thursday to attend the 6th Summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA) to be held on October 12-13.
DAILY AGENDA
The unemployment rate dropped by 0.4 points to 9.6% in August, month-over-month, according to TurkStat.
IN OUR MAGAZINE THIS WEEK:
>> On the cover: Riccardo Landi, Director of the Istanbul Office of the Italian Trade Agency (ITA) is on our cover this week. Italian companies are expanding their investments in Turkey beyond traditional sectors, according to Landi. “Investments, even from SMEs, in the technology sector are increasing in general,” he said in an exclusive interview with TR MONITOR on the sidelines of Ankiros fair, the biggest metallurgy meet-up in the Eurasia region. You can read the details on pages 8-9.
>> ‘Putin is in deep trouble’, according to our Geo-Politics Columnist Professor Ilter Turan. You can read the details on page 10.
>> Q&A: Prof. Dr. Fatih Ozatay, Professor of the Department of Economics at TOBB University of Economics and Technology (TOBB ETU), Daily DUNYA Columnist. P. 11.
>> Chief Economist Gunduz Findikcioglu: “Overshooting” and the trade balance. Pp. 12-13.
>> Our Foreign Policy Columnist Zeynep Gurcanli addresses ‘Foreign policy in light of what was not said in Parliament’ on page 14.
Meanwhile…
>> President Recep Tayyip Erdogan reiterated at a mass opening ceremony in Balikesir that the policy rate will continue to be cut.
>> The Environment, Urbanization and Climate Change Ministry imposed a TRY 385.8m fine on 3,165 facilities during 49,025 environmental pollution inspections conducted in the first nine months of the year.
>> Exports by Turkey’s automotive industry rose by 11.7% to USD 2.75bn in September, year-over-year, according to the Uludag Automotive Industry Exporters’ Association (OIB).
>> The Ministry of Industry and Technology prepared 1,261 investment incentive certificates in August. The value of the certified projects totals TRY 47.47bn. These investments are estimated to employ 31,148 people.
>> The land and office applications within the scope of the TOKI Social Housing Project will continue on October 10-November 7.
