The real sector, which suffered from the successive hikes in energy prices due to TRY devaluation last year, seems to be having difficulty due to the global energy crisis caused by the Russia-Ukraine war and increasing production costs. Electricity supply companies offer manufacturers fixed-term electricity contracts which have raised electricity unit prices by 20-35% to TRY 4.0-4.2 per kilowatt hour due to the cost increase stemming from coal and natural gas production and the hike expected for the foreign exchange rate. Representatives of the real sector, which previously preferred fixed-term contracts instead of the spot market to get electricity at an affordable price, said the price is much higher than the tariff in the spot market and even exceeds the current price cap set by the Energy Market Regulatory Authority (EPDK). They said each hike in electricity prices will raise the cost for manufacturers and they won’t be able to reflect it on export and domestic market prices due to the declining purchasing power at home and the recession abroad.
Turkey’s Presidency of Defense Industries stated that there has been no development regarding the purchase of Russia’s S-400 air defense system. The process has been ongoing based on the original deal, it added. Earlier, quoting the head of Russia’s Federal Service for Military-Technical Cooperation (FSVTS), Dmitry Shugayev, TASS news agency claimed that a contract has been signed to deliver a second batch of the air defense systems to Turkey.
Turkey’s benchmark stock index rallied to an all-time high of 2,913.30 points at yesterday’s close, up 1.62% on a daily basis. After starting the day at 2,876.03 points, Borsa Istanbul’s BIST 100 index gained 56.12 points from Monday’s close of 2,857.18 points. During the day, the index fell to 2,773.06 points with a decline of around 3.0% due to the concerns over the S-400 air defense system agreement. Thus, the index has seen the highest intra-day volatility level since June 8. The total market value of the BIST 100 was around TRY 2.3tr by its close, with a daily trading volume of nearly TRY 66bn. Analysts said 2,880 points and 2,850 points will be the support level and 2,950 points will be the resistance level for the BIST 100 index, in technical terms.
President Recep Tayyip Erdogan will pay a one-day working visit to Lviv on Thursday upon the invitation of his Ukrainian counterpart, Volodymyr Zelensky. The parties will discuss Turkey-Ukraine relations. Moreover, a trilateral summit will be held between United Nations Secretary-General Antonio Guterres, President Zelensky, and President Erdogan. Guterres will also visit the Joint Coordination Center in Istanbul set up for Ukrainian grain exports on August 20 upon the invitation of President Erdogan.
The short-term external debt stock surged by 10.9% to USD 134.8bn in June, compared to the end of 2021, according to the Central Bank.
>> The Residential Property Price Index surged by 9.0% to 469.8 points on June, month-over-month, according to the Central Bank.
>> The TOBB ETU Center for Social Policy Research’s (SPM) Misery Index rose from 80.9 points to 90.7 points in June, compared to the previous month. The Extended Misery Index (GSE), which includes the integrated rate of the potential labor force, increased from 94.0 points to 100.4 points in the same period.
>> The economic value created by Google in four basic goods and services categories in Turkey reached TRY 476bn, according to a report prepared jointly by Google Turkey and Deloitte.
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Our Eco Analysis columnist Alaattin Aktas addresses why trust in the Turkish economy is important in terms of foreign direct investments and portfolio inflows, and therefore closing the current account deficit.
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