President Recep Tayyip Erdogan will speak with his Russian and Ukrainian counterparts over the phone today, according to Presidential Spokesman Ibrahim Kalin. Speaking in a televised interview, Kalin said Turkey continues intense diplomacy with both sides amid the ongoing Russia-Ukraine war. Touching on the recent tripartite meeting between Turkey, Russia, and Syria, Kalin stated that more meetings between officials of the three countries are expected in the coming months.
The Consumer Price Index rose by 1.18% while annual inflation fell by 20.12 points 64.27% in December, compared to the previous month, below the market expectation, according to the Turkish Statistical Institute (TurkStat). The economic world estimated the monthly inflation to increase by 2.6% and annual inflation to hit 67% for December. Apart from the base effect, the decrease stemmed from the surprise decline in food prices. The December figure also showed that annual inflation remained below the inflation target of 65% set in the Medium-Term Economic Program (OVP) and the target of 65.2% determined in the Central Bank’s Inflation Report. Yet, inflation has continued to increase for 48 consecutive months. The domestic producer price index, meanwhile, dropped by 0.24% monthly and reached 97.72% annually in December 2022. Inflation will continue to decline with the base effect in the upcoming period, but the rigidity continues in inflation, according to analysts.
The high inflation period has ended, according to Treasury and Finance Minister Nureddin Nebati. Speaking in an interview with Bloomberg HT, Nureddin Nebati said the hike in foreign exchange (FX) rates is among the main reasons for an inflation in Turkey. “The surge in FX rates has reached the necessary point by remaining below inflation. The upward trend in inflation has been broken. High inflation period has ended,” Nebati added.
Turkey and Bulgaria signed an agreement for the transmission of up to 1.5 billion cubic meters of natural gas a year. The new deal covers a 13-year period, according to Energy and Natural Resources Minister Fatih Donmez. The gas agreement was signed between the two countries by the general managers of the BOTAS and Bulgargaz.
Following successive records, Turkey’s benchmark stock index ended yesterday at 5,626.57 points with a decrease of 0.61%. Borsa Istanbul’s BIST 100 index lost 34.53 points from the previous close with a daily trading volume of TRY 144.9bn. The global equity markets have started to seek a direction after many investors returned from the Christmas holiday, according to analysts. They also said 5,550 points will be the support level and 5,700-5,750 points will be the resistance level for the BIST 100 index, in technical terms.
The Central Bank will release the Real Effective Exchange Rate for December (2.30 p.m.).
>> Civil servants’ salaries and pensions were raised by 25% for the first half of the year, according to President Recep Tayyip Erdogan. Thus, the lowest salary for civil servants rose from TRY 9,705 to 11,396 while the lowest pension of a retiree civil servant increased from TRY 6,078 to TRY 7,597.
>> The Turkish air conditioning exports rose by 7.9% to USD 6.68bn in 2022, year-over-year, hitting an all-time high, according to daily EKONOMI.
>> The net FX position of non-financial companies posted a USD 83.91bn deficit in October, down by USD 1.57bn from a month ago, according to the Central Bank.
>> The state-owned Ziraat Bank, Vakifbank, and Halkbank will provide a loan of up to TRY 500,000 to support entrepreneurs operating in the technology field.
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Our Eco Analysis Columnist Alaattin Aktas examines the course of inflation and prices.