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Not much new to write home about
TURKEY · Report · 07 Jul 2024

Turkey exploded in anti-Syrian rage during the week, while Syrians in Turkey-controlled areas of their country retaliated in kind. The politics author does not anticipate more inter-communal violence, but President Erdogan is now desperate to make peace with Assad. The major threat to Erdogan fro...

Downside surprise on inflation
TURKEY · Report · 03 Jul 2024

Consumer prices rose by a less than expected 1.6% in June (vs. 2.2%), with the 12-month rate declining visibly to 71.6% from 75.4% in May, helped, as anticipated, by base effects. Producer prices rose by 1.4% in the month (June 2023: 6.5%), with a much sharper decline in the 12-month PPI rate to ...

Hello early elections, bye-bye ESP?
TURKEY · Report · 30 Jun 2024

The main opposition leader Ozel wants early elections before or by end-2025. If Erdogan turns down the offer, CHP will not support any early election legislation. This means, Erdogan must either take up Ozel on his offer or scramble to find 360 votes in the Grand Assembly to send a new constituti...

MPC: No Change, As Expected
TURKEY · Report · 27 Jun 2024

The CBRT/MPC left the policy rate (one-week repo) unchanged at 50% (simple) at today’s meeting, as expected. As for the content of the statement, the (middle) paragraph on the monetary policy stance, as well as monetary policy and inflation outlooks, has been kept fully intact, while there were t...

The Package, FATF and the BRICS
TURKEY · Report · 23 Jun 2024 · 1 response

The Treasury and Finance Minister Mehmet Simsek will brief the CHP economics team on the Economic Stabilization Program on Monday, in yet another sign that President Erdogan is committed to normalization despite Bahceli’s objections. Turkey has decided to join BRICS+, probably to alleviate Put...

Bahceli’s casus belli to Erdogan
TURKEY · In Brief · 13 Jun 2024 · 1 response

In a week widely anticipated to be headlined by the second Erdogan - Ozgur Ozel (CHP chair) summit, MHP leader Devlet Bahceli stole the limelight by issuing an unprecedently strong casus belli to Erdogan. The Erdogan-Ozel meeting went better than I anticipated, with leaders resolving to continue ...

Hotter politics, cooler economy
TURKEY · Report · 09 Jun 2024

The Turkish financial markets were rattled briefly mid-week, as the main opposition leader Ozgur Ozel threatened to launch a campaign for early elections. He later clarified his statements, essentially suggesting it is too early for that. Yet, his strategy of negotiating with Erdogan includes lev...

Broadly as expected, still sticky
TURKEY · Report · 03 Jun 2024

Consumer prices increased by a slightly higher than expected 3.4%, m/m, in May, with the 12-month rate peaking at 75.5% up from 69.8% in April. Domestic-PPI posted a 2% increase, which raised the 12-month rate to 57.7% from 55.7% a month earlier (Graph 1; Table 1).

Dream summer is here, will it survive X-mas?
TURKEY · Report · 02 Jun 2024

Two months after local elections, the political analyst is able to see the end of the current political disequilibrium. In the base-case scenario, the process culminates in early elections in 2027 or 2028, which would give Treasury and Finance Minister Mehmet’s Simsek’s economic stabilization pro...

Whopping sequential growth in Q1
TURKEY · Report · 31 May 2024

The Turkish economy grew by 5.7%, y/y, and 2.4%, q/q, in the first quarter of the year (Graph 1). The latter is much higher than (at least this author) expected and is rather broad-based, too, propelled by all demand engines with private consumption, government consumption, investment and exports...

Life in the carry trade haven
TURKEY · Report · 26 May 2024

The domestic political agenda is becoming more fragmented by the day, as President Erdogan fails to act decisively to mobilize his party and the media to guide the discussion in the direction of his strengths. The post-election polls largely reveal Ozel and CHP retaining their popularity, which c...

MPC: Mop up and wait
TURKEY · Report · 23 May 2024

There was no surprise at today’s CBRT/MPC meeting, with the Committee keeping the policy rate (one-week repo rate) unchanged at 50%. The statement was also largely unchanged. There were some minor revisions to the first paragraph on the general state of the economy with references to a “limited d...

Damn the package, full speed ahead
TURKEY · Report · 19 May 2024

The post-election shakeup in Turkish politics continues at an accelerating pace, with surprising twists and turns. The current fashion is “normalization”, which obviously means different things to each protagonist, but in essence entails rapprochement between rival blocs and more cooperative deci...

Towards a new normal in politics?
TURKEY · Report · 12 May 2024

The stunning defeat of Messrs. Erdogan and Bahceli in municipal elections upset the political equilibrium. All actors, led by Erdogan, are scrambling to reposition to deal with the new reality. It is possible for the quest for a new equilibrium to result in a more normal, democratic and less xeno...

Watch the (monthly) pace and hope for the best
TURKEY · Report · 09 May 2024

The CBRT released the second Inflation Report of the year with a nice and comprehensive presentation by Governor Fatih Karahan (see link here for the transcript, here for the presentation). We provide some relatively detailed highlights on the presentation and the Q&A session, followed by comment...

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