Dear friends,
As if we don’t have enough problems already, now we have to deal with the disruptive consequences of the earthquake. Let’s take a quick look at these one by one:
Growth: At the beginning of the year, Turkish economy was estimated to grow by around 4%, but it looks like it will be less than 3%.
Inflation: My initial forecast about the inflation was that it would not drop below 35%, now, given the circumstances, the best-case scenario is that it will hit 50-60%.
Unemployment: It is quite unlikely that the unemployment rate in Turkey will fall back to single digits. I expect it to rise to 13% again.
Current Account Deficit: Turkey’s current account deficit was expected to be below 4% of its GDP, now we could evidently say that it will exceed that rate.
Budget Deficit: will continue to run out of control. I even expect the government to create an additional budget just like they did last year.
Interest Rates: They were supposed to approach inflation rates while the latter would fall, but they will continue to rise in the market.
Policy Rate: CBRT may continue to cut its policy rate.
Exchange Rates: With the government’s overcontrol, they remain calm for now. But, surely, this stability will not be permanent.
Stock Exchange: Remember, the best profit is the one you already have in your pocket.
Sometimes I like to explain things concisely, rather than in an unnecessarily lengthy manner. Because when you use too many words, they often don’t make much sense. So, in short, I am anticipating a much more difficult year ahead for Turkey.
