What matters this morning

We have made a hot start to September in terms of economic data agenda. Second quarter growth data was released this morning. Annual inflation for August, Central Bank’s interest rate decision and the Medium-Term Economic Program will follow.

The country’s gross domestic product (GDP) increased by 21.7% in the second quarter (Q2) of the year, compared to the same quarter of the previous year, according to the Turkish Statistical Institute (TurkStat). The GDP grew in line with the expectations by the support of strong exports, the opening the business in June, and the base effect.

TurkStat will release the inflation figures for August on September 3. The annual inflation which exceeded expectations and reached 19% in July, is projected to decrease to 18.5% in August. Food prices will be determinant in inflation while the impact of change in special consumption tax (SCT) base in automotive sector will also be observed. SCT arrangement may bring a 0.5-1.0-point decrease to CPI, according to the economists.

The Central Bank’s Monetary Policy Committee (PPK) meeting will held on September 23. The policy rate which stands at 19% is expected to remain unchanged. However, inflation outlook and messages about the monetary policy in the PPK statement will be the focal point of the economy world.

The details of the Medium-Term Program (OVP), which is considered as the 3-year roadmap of the national economy, will also be released this month. The main macro indictors such as inflation, employment, growth, exports, and current account deficit will be set towards the 2022-2024 period with the OVP. Preparations for the central government’s budget for 2022 will also accelerate after the OVP is announced. The OVP and Fiscal Plan has been merged as a single paper under the umbrella of the OVP. Accordingly, the fiscal plan will be announced, and basic budget size will be set with the OVP. Ministries will work intensively on the budget this month and will prepare their budgets for 2022.

Looking at the money market following GDP figure for Q2, USD/TRY hovers around yesterday’s closure levels at 8.30-8.32, while EUR/TRY is traded at 9.81.

Oil prices show a stable trend before OPEC’s meeting to be held today, while refineries in the U.S. try to estimate the damage of the Ida Hurricane. Brent crude stands at USD 72.31 per barrel this morning.

Gold prices, meanwhile, slightly changed prior to the non-agricultural employment figures in the U.S. to be released this Friday. Spot gold surged by 0.09% to USD 1,815 per ounce.


Istanbul Chamber of Commerce (ITO) will release retail and wholesale prices in Istanbul (12.00 pm). This data helps markets to mirror consumer price figures to be announced for overall Turkey.

The Central Bank will hold a meeting with investors, economists and analysts via videoconference (2.00 pm).

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