You Have To Experience It For Yourself

Recently, I have been making presentations on the “2023 Expectations” of different sectors. I usually arrive at the venue a little early to get the chance to listen to senior executives about their economic expectations.


Except for some segments, the chemical industry seems to be just fine, the construction industry, on the other hand, tries to make more selective decisions, yet it still has hope for the future. The non-bank financial institutions are quite worried, while the automotive industry is cautiously optimistic as opposed to the fact that the textile industry is cautiously pessimistic. The retailers are complaining about the high energy costs and rents, as tourism and travel industries seem quite hopeful.


Most of these sectors make intense efforts to attract the interest and the funds of foreign investors or partners. In this process, banks need to assist those who want to expand their businesses and provide the multinational companies in Turkey with as much money as the capital injection made by foreign partners. The banks need to be particularly generous in order to help foreign capital to stay in Turkey, expand its activities, hence, to transfer funds to the economy.


The biggest problem is the challenges of getting a loan, which is supposedly implemented to stop inflation We know that the regulatory authorities will not facilitate the loan giving process until January. It can also be observed that consumers still have appetite to buy goods and services that they know will be more expensive tomorrow. It is absurd to think that unfavourable conditions will magically improve. On the other hand, it is difficult to make conditions more flexible when there is 85% inflation. The only thing that looks ridiculous in this equation is the reduction of policy rates, which only help was to provide lower interest rates on credit cards. Perhaps by ensuring that citizens do not spend cash, the government is trying to bring consumption under control.


According to the CBRT data, credit card spending, which dropped sharply in July, have increased rapidly in the following months, which might be caused by the measures introduced after the unprecedented rise in May this year. However, when we look at the trend, we can notice that credit card spending is constantly going up in line with the inflation rate. Grocery and food accounts for nearly 50% of our total credit card spending.


“Cause and Effect Relationships Are Messed Up.”


When analysing data, it should be taken into account that there are always multiple factors in the equation:


– Households pushing their credit card limits due to insufficient cash

– Gradual decrease in cash spending

– Increase in prices due to inflation

– Higher demand for credit cards that earn points and benefits as you spend

– Increase in the number of transactions via contactless payment systems


It is difficult to keep the market vital without consumer demand. The fact that global demand is also declining would not allow Turkey to rely on exports alone. When banks are allowed to provide only a limited number of commercial loans, enterprises continue to increase their product prices so as to be able to maintain their current capacity in the face of rising wages, which also leads to a constant rise in demand. Also, most enterprises are faced with major costs because they do not take into account the economies of scale when increasing their capacity.


The methods applied by the economy officials do not exactly tell that they have a clear plan or programme for the future. They rather give the impression that they wait for many problems to be resolved by themselves. Perhaps, the fate of the economy is left to the discretion of the market. In the meantime, the government is trying to find substantial amounts of external funds before the elections begin. I hope everything will be good for our country.