Turkish Industry and Business Association (TUSIAD) President Simone Kaslowski wrote an article about Russia’s invasion of Ukraine and its impact on the Turkish economy. Touching on energy costs the TUSIAD President said: “The price of Brent crude rose from USD 70 to USD 110 per barrel. Every USD 10 hike per barrel creates a USD 5bn cost in our pockets. That’s why an extra USD 35-40bn cost emerges for our economy at the first stage with a rough calculation.”
Kaslowski also stated that Turkey, in addition to oil price woes, is facing 55% inflation and low Central Bank reserves. “There is clear pressure on foreign exchange rates that may pose a risk. There are sharp hikes in not only agricultural products such as wheat and soybean but also in all commodity prices. Adjustments in salaries for the year and the surge in the minimum wage have already melted. We’ve faced this crisis while we couldn’t fully fight against inflation within the economic frame. The solution is more difficult than we think once we lose control in the fight against inflation. Moreover, it seems hard to return inflation from 60% when we face an external shock,” Kaslowski noted.
Kaslowski also added that Turkey’s current account deficit will increase, and investments will slow as Turkey posted a foreign trade deficit of USD 18bn in total in January-February, before the war had emerged. “This already shows that our foreign trade deficit, which stood at USD 15bn, has risen to USD 25bn with February. We’ll have to cope with a higher current account deficit in 2022 than in 2021 because the war will create cost in energy and commodity prices, slow our exports and reduce tourism revenues,” the TUSIAD President added.
Approximately 4.5 to 5 million pairs of shoes from 200-250 export companies have remained unsold due to cancellations and postponements of orders caused by the Russia-Ukraine war, according to Berke Icten, Chairman of the Footwear Industrialists Association of Turkey (TASD). “These shoes are value-added products. Russia and Ukraine are among the markets that import products with the highest value-added. The price of these shoes hovers around USD 25-30 per pair,” Icten said. The TASD has initiated work to convert these shoes into cash. The association plans to offer these shoes to the domestic market.
Turkey and Germany have agreed to step up diplomatic efforts to solve the Ukraine war crisis while also taking measures to protect European security, according to President Recep Tayyip Erdogan. Speaking in a joint press conference with German Chancellor Olaf Scholz, President Erdogan said that current high-level consultation mechanisms with Germany should be revived. Erdogan added that Turkey and Germany are determined to boost their bilateral trade volume to USD 50 billion from USD 41bn last year. Erdogan also noted that it is too early to comment on Turkey’s possible purchase of more Russian weapons given Moscow’s invasion of Ukraine.
House sales rose by 20.1% to 97,587 units in February, compared to the same month of the previous year, according to the Turkish Statistical Institute (TurkStat).
The producer price index of agricultural products (Agriculture-PPI) jumped 68.49% in February, compared to the same month last year, according to TurkStat. Agriculture-PPI surged by 13.74% month-over-month.
The number of paid employees, including the manufacturing, construction, trade-services sectors, rose by 6.8% from 12.6 million to 13.5 million in January, year-over-year, according to TurkStat.
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