What matters on Monday, October 3

Inflation, PMI, and foreign trade data for September are on the economic data agenda this week.

The PMI index has been below the 50 threshold for six months. However, it improved slightly to 47.4 in August compared to the previous month. Despite this, eight out of 10 sub-sectors had PMI values below 50, and nine of them had a decline in export orders. September data to be announced today will still be below 50. However, the important thing in today’s data will be how the index has changed compared to August

There are two months until the onset of the base effect in inflation. After the September data, which has been announced today, and the release of the October-November data, headline inflation will begin to decline in December due to the base effect. In September, the increase in consumer prices was 3.08%, while the increase in producer prices was 4.78%.

There are two risks to the expected decline in inflation in the upcoming period. The first is new depreciation in the TRY, and the second is the possibility of a new rise in commodity prices. Interventions to prevent/slow down the depreciation of TRY seem to continue. Therefore, the risk of this seems to be lower. The commodity price increase is an external risk that cannot be controlled. Raw material prices, which have been falling rapidly in recent months, will start to rise again if there are indications that the recession will ease, or that interest rate increases will slow down.

In the foreign trade data for September to be announced this week, we may not see many changes from previous months. The loss of momentum in exports continues due to declining prices and weakening foreign demand. On the other hand, imports are increasing more than twice as fast as exports due to rising energy prices and stronger domestic demand. In addition to the slowdown in the growth of target markets, the decline of the EUR and GBP against the USD also pulls exports down.

Regarding political data for the week, the Parliament will begin its session on Tuesday. The first agenda item for the parliament will be the Press Law, known as the law on combating disinformation within the public. The commission phase for this legislation was completed in June.

On Thursday, President Recep Tayyip Erdogan is expected to attend the first meeting of the European Political Community project. The meeting will be held in Prague from October 6-7, 2022.

An omnibus bill including the liquidation of debts under TRY 2,000 for which enforcement proceedings have been initiated, extending the time for the FX-protected deposit (KKM) application, and regulating the supply of natural gas support of up to TRY 1,000 by companies for their employees, will also be submitted to the Speaker’s office this week. Moreover, members of the Cons.titutional Court, the Personal Data Protection Board, and the Radio and Television Supreme Council (RTUK) will be elected. Political parties will also hold their first group meetings of the new legislative year this week.


The Istanbul Chamber of Industry (ISO) will release Turkey Manufacturing PMI (Purchasing Managers Index) for September.

Annual inflation hit 83.45%, and the Consumer Price Index rose by 3.08% in September, according to the Turkish Statistical Institute (TurkStat).

The domestic producer price index (D-PPI), increased by 4.78%, and the annual producer inflation jumped 151.50% in September, according to TurkStat.


>> On the cover: Oguz Gulec, Chairman of the Board of Darussafaka Society is on our cover this week. Darussafaka Society, the first-ever education NGO in Turkey, is preparing to carry its 159-year legacy into the future thanks to its valuable donors, according to Gulec. You can read the details on pages 8-9.

>> Professor Ilter Turan says that ‘the outcome of the Italian elections indicates problems’ on page 10.

>> Report: TAV eyes ‘Airport cities’. P. 11.

>> Chief Economist Gunduz Findikcioglu: Self-inflected wounds. You can read the details on pages 12-13.

>> Our Foreign Policy Columnist Zeynep Gurcanli addresses if the western alliance has crumbled on page 14.

>> Don’t forget to check your physical mailboxes for the October issue of the printed Monthly Panorama, which is fresh off the presses.


>> The Istanbul Wage Earners Cost of Living Index (WECLI), which indicates the movement of retail prices in Istanbul, jumped 107.42% in September, compared to the same month last year, according to the Istanbul Chamber of Commerce (ITO). The Wholesale Price Index, which reflects wholesale prices in the city, climbed by 98.17% in the same period. The Istanbul WECLI rose by 6.06%, and the Wholesale Price Index increased by 2.94% in September, month over month.

>> The number of applications for the country’s largest-ever social housing project has exceeded 5 million, according to Environment, Urbanization and Climate Change Minister Murat Kurum. He said President Recep Tayyip Erdogan instructed TOKI to raise the number of plots where houses will be built to 1 million.

>> The Pendik-Sabiha Gokcen Airport metro line was inaugurated with the attendance of President Recep Tayyip Erdogan. The metro line is expected to serve 1.2 million passengers per day.

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