What matters on Thursday, October 6

The Turkish economy will grow by 4.7% this year, according to the latest report prepared by the World Bank. The institution said the decrease in investors’ confidence and TRY devaluation will create pressure on companies’ and banks’ balance sheets.  It added that the hike in energy and food prices deteriorated the budget of low-income households and the decline in the poverty rate remained slow after the pandemic despite the employment increase. The report also noted that the erosion in the TRY and high inflation weakened banks’ capital buffers.

The Economic Coordination Council (EKK) convened under the presidency of Vice President Fuat Oktay. The council, which evaluated the recent risks in the global economy, discussed developments in the Turkish economy and steps that need to be taken. It also reviewed preparations for the 2023 Central Government Budget. As part of the developments in energy and food supply security, the EKK also evaluated plans in the country for the upcoming period. Within the scope of financing supply security, the council decided to use alternative financing instruments from relevant institutions and organizations besides the support provided within the frame of the budget opportunities.

The economy won’t function without price stability and the priority must be the fight against inflation, according to Turkish Industrialists and Businessmen’s Association (TUSIAD) President Orhan Turan. Speaking at a webinar hosted jointly by TUSIAD and Koc University, Turan said that financing is now more difficult to secure. “We shouldn’t forget that the economic difficulty which we experienced in the recent past was a period when the ‘global winds’ blew behind us. Now, the global outlook and global financial conditions aren’t in favor of us,” he added.

Turkey’s benchmark stock index ended yesterday with gains to close at 3,484.42points, up 0.76% or 26.39 points compared to the previous close. Borsa Istanbul’s BIST 100 index’s lowest value during the day was 3,433.65, while its daily high was 3,508.46. The total market value of the BIST 100 was around TRY 2.7tr by market close, with a daily trading volume of TRY 75.2bn. The pricing of investors hovering between inflation and the recession risk has paved the way for fluctuations in the markets and the volatility may continue due to uncertainties in monetary policies and economic activities, according to analysts. They said 3,200 points will be the support level and 3,500-3,550 points will be the resistance level for the BIST 100 index, in technical terms.


The Central Bank will release weekly monetary and banking statistics (2.30 p.m.).


>> The Treasury and Finance Ministry has authorized Citigroup, Dubai Islamic Bank, Emirates NBD Bank, and HSBC for the Sukuk issuance in USD in international capital markets. The banking sources said the issuance will have a 3-year maturity. The Treasury, which borrowed USD 10bn from the international capital markets last year, estimates the figure to reach USD 11bn this year.

>> The Metaverse may contribute USD 37.5bn to the Turkish economy by 2035, if the opportunities in the sectors such as retail, education, gaming, and e-sports are seized well, according to the data shared in the Meta Innovation meeting hosted jointly by Meta and xtopia.

>> A Union of Participation Finance Institutions will be established, according to the Participation Finance Strategy Paper published by the Presidential Finance Office.


>> Credit rationing

Our ‘Tour D’Horizon’ Columnist Fatih Ozatay analyses credit rationing in the country.

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