The World Bank (WB) introduced its Turkey Economic Monitor report with an online panel. Speaking at the meeting, WB Turkey Country Director Aguste Tano Kouame said the national economy resisted in the pandemic environment, but it should be prepared for the next period.
Progress to be provided in vaccination will be the determining factor towards the country’s success in the future, according to David Knight, Senior Economist at Macroeconomics, Trade and Investment Unit of the WB. Sharing the main findings of the report, he said the investment level is below the potential and acceleration of this potential with a proper environment will be a positive process for the country. However, uncertainties are still considered as the risk factor.
“The country’s current account deficit finance can be affected adversely if some developed states, especially the U.S. tighten their monetary policies,” said Knight, stressing that the country should strengthen buffers against foreign shocks and continue tight monetary policy. The WB has revised the country’s economic growth estimation for 2021 to 5%.
We will know more on Monday, as the Turkish Statistical Institute (TurkStat) will announce GDP growth for the first three months. The general expectation stands at 7%, which may seem high. This is due to the fact that the first quarter of the year is the period where the industry has the largest share in the economy. The industrial production was very strong in the first quarter, that’s why we’ll see high growth rates both in today’s data and the second-quarter data.
Looking at the money market, USD/TRY is one step closer to its record high at 8.58 and reached 8.56. EUR/TRY, meanwhile, broke another record at 10.44.
Spot gold, which tested USD 1,900 per ounce in the mid-week, is traded at USD 1,893 per ounce at the last trading day of the week. Brent crude exceeded USD 69.50 per barrel.
The international credit rating agency Standard and Poors (S&P) released its second report of this year on Turkey. S&P affirm the country’s long-term currency credit rating at B+ with a ‘stable’ outlook.
The Economic Confidence index decreased by 1.3% to 92.6 in May, compared to the previous month, according to the TurkStat.
The country’s exports increased by 109.2% to USD 18.7bn, while imports rose by 61.1% to USD 21.8bn in April, compared to the same month of the previous year, according to the TurkStat.
The Services Producer Price Index (S-PPI) rose by 26.26% in April, compared to the same month of the previous year, according to the TurkStat. S-PPI also surged 3.43% on monthly basis.