Today, President Recep Tayyip Erdogan will announce Turkey’s largest-ever social housing project to include all 81 provinces. The TRY 362bn social housing project is expected to create over TRY 1.5tr in economic mobility in more than 250 sub-sectors.
The current account balance posted a higher deficit than expected due to energy prices. The current account deficit (CAD), which amounted to USD 4.01bn, surpassed the market estimation of USD 3.7bn in July. It also increased by USD 3.7bn on an annual basis. While the current account deficit continues to increase, the energy-driven hike in foreign trade deficit adversely affects the CAD, according to Tera Yatirim Chief Economist Enver Erkan. The foreign trade deficit of goods surged by USD 6.1bn to USD 9.31bn in July, year-over-year.
As Erkan says, energy prices, the most important breakdown in the CAD, continue to increase due to the energy crisis abroad and the instability in foreign exchange rates in the country. That’s why energy imports create a problem due to the pressure of TRY devaluation. “We estimate energy imports to double and reach USD 100.5bn at the end of this year, compared to last year,” Erkan added.
The ‘Liraization’ strategy focuses on long-term permanent solutions, according to Central Bank Governor Sahap Kavcioglu. “This process is also a challenge to a structural problem that has remained unresolved despite many years of effort,” Kavcioglu said in an article titled “Liraization Strategy” on the Central Bank’s blog. Noting that the liraization strategy lays out a comprehensive policy framework that has been continuously improved to ensure that the Turkish economy achieves permanent price and financial stability, the Central Bank Governor added: “While designing its monetary policy decisions, the bank is confronted with the Turkish economy’s structural problems, particularly regarding a sustainable external balance. In this process, instead of easy but temporary solutions, it focuses on permanent long-term solutions, despite the difficulties in the short and medium term.”
Turkey’s benchmark stock index ended Monday at another record-high of 3,649.21 points, up 3.63% from last week’s close. Starting the week at 3,585.63 points, Borsa Istanbul’s BIST 100 index gained 127.82 points from the previous close. The total market value of the BIST 100 was around TRY 3tr by market close, with a daily trading volume of TRY 117.5bn. The risk appetite, which has increased in the global equity markets after the uncertainties over central banks’ monetary policies decreased, has been carried to the new week, according to analysts. They said the fact that the Federal Reserve will most likely increase the interest rate by 75 basis points has been priced. Analysts also stated that 3,540 points will be the support level and 3,650 points will be the resistance level for the BIST 100 index, in technical terms.
The Industrial Production Index dropped by 6.2% in July, compared to the previous month, according to the Turkish Statistitcal Institute (TurkStat). The index rose by 2.4% on an annual basis.
Retail sales volume increased by 2.0% and retail turnover jumped 114.8% in July, year-over-year, according to TurkStat.
The total turnover index soared by 122.4% in July, compared to the same month last year, according to TurkStat. The indec decreased by1.5% on a monthly basis.
>> The overall export unit value index increased by 6.2% and the overall import unit value index jumped 27% in July, compared to the same month last year, according to TurkStat. The overall export volume index surged by 6.8% and the overall import volume index climbed by 11.3% in the same period.
>> The government supports 323 brands of 306 companies within the scope of the Brand and Turquality programs, according to Trade Minister Mehmet Mus.
>> 79% of the Turkish public favors EU membership, according to Faruk Kaymakci, Deputy Foreign Minister and EU Affairs Director.
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Daily DUNYA Editorial Coordinator and Columnist Talip Aktas compares Turkey’s economic growth with developed and developing countries.