The Central Bank announced that the current account deficit (CAD), which remained slightly below estimations, was USD 5.15bn in February. Apart from increasing energy prices, the surge stemmed from the hike in intermediate goods imports. A considerable hike has been observed in energy import costs in recent months with the adverse impacts of the Russia-Ukraine war, according to the Gedik Yatirim. Turkey’s energy imports rose from USD 8.6bn to USD 24.9bn in the first quarter (Q1) of 2022 as compared to Q1 2021. Gedik Yatirim says the CAD may approach USD 40bn at the end of the year due to increasing energy costs, in particular. “Assuming that Brent crude reaches USD 80 per barrel, it will bring a burden of USD 25-30bn to the current account balance,” the institution noted. Gedik Yatirim also estimates a limited loss of USD 3bn in tourism will stem from the war. “In light of these developments, we estimate the CAD to hit USD 38.5bn at the end of 2022. The forecast also includes a normalization in spot natural gas prices,” the company added.
Turkey works towards an inflation-protected savings product and is prioritizing loans toward investments that do not face the pressure of inflation, according to Treasury and Finance Minister Nureddin Nebati. Speaking after the meeting held with the business world in Mardin, Nureddin Nebati said the government would bring inflation to a moderate level at the end of this year. “We are fighting against inflation and want to increase purchasing power to a higher level than before. The surge in the Consumer Price Index is temporary and we are taking steps to limit its affect on citizens,” Nebati added. The Treasury and Finance Minister also stated that Turkey has created 2.3 million new jobs over the past two years as of February and that the country will continue to generate high revenue from tourism as a result of diversification in the sector.
Turkey’s benchmark stock index, Borsa Istanbul, surged by 2.33%, hitting an all-time high of 2,449.11 points at close yesterday. After starting the day at 2,403.52 points, the BIST 100 index jumped 55.72 points from Friday’s close of 2,393.39 points. Closing the day with a market value of around TRY 2tr, the benchmark index posted a daily trading volume of TRY 63.6bn. The relations between Turkey and Western countries that have been improved as a result of the Russia-Ukraine war have boosted TRY assets, according to analysts. They say that hawkish central banks, including the Federal Reserve, and the surge in daily coronavirus cases in China increases risk perception in the global equity markets while the domestic market continues to differentiate positively. Analysts also pointed out that the possibility that the tension may escalate in the Russia-Ukraine war plays an important role in risk appetite, which is currently low. They also stated that 2,340 points will be the support level and 2,450 points will be the resistance level for the BIST 100 index, in technical terms.
DAILY AGENDA
The total turnover index jumped 105.4% in February, year over year, according to the Turkish Statistical Institute (TurkStat). The index surged by 7.9% on a monthly basis.
The industrial production index rose by 13.3% in February, compared to the same month last year, according to TurkStat. The index increased by 4.4% on a monthly basis.
The retail sales volume rose by 6.2% while the retail turnover jumped 82.2% in February compared to the same month last year, according to TurkStat. The retail sales volume increased by 0.5% and the retail turnover increased by 7.5% month-over-month in February.
The Ministry of Treasury will issue a 10-month (315 days) maturity zero coupon treasury bill and reissue a 6-year (2,345 days) maturity semiannually floating rate note.
The Cabinet will convene under the presidency of President Recep Tayyip Erdogan (6.00 pm).
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The goal of the economy is to enable people to live in prosperity. The most basic way to do this is through low inflation. But there is no brake, and in an economy without brakes, inflation accelerates day by day.
