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July 12, 2019

Turkey | Promising signal from May IP

IP declined by 1.3% yoy in calendar adjusted terms in May, slightly better than market expectation (-2%). Hence, the annual contraction in IP (c.a.) decelerated further from -4.7% in 1Q19 to -2.6% in the first two months of 2Q19. In absence of new shocks, we maintain our GDP growth forecast at 0.3% for 2019.

July 3, 2019

Turkey | June inflation opens the door for rate cuts

Consumer prices increased by 0.03% in June, lower than consensus but slightly higher than ours (0.2% Bloomberg vs. -0.15% BBVA Research). Supported by the base effects, annual inflation declined to 15.7% from 18.7% in May.

June 18, 2019

Turkey | Some negative signals from April IP

IP(cal. adj. ) contracted by 4% yoy in April, worse than market expectation (-2.5%). The deceleration in the yearly contraction still continues but loses some steam. Though, supported by the current momentum and positive base effects of 2H19, in absence of new shocks, we maintain our GDP growth forecast at 0.3% for 2019.

June 12, 2019

Turkey | CBRT remains “tight” but closer to “ease”

As expected, the CBRT maintained its policy rate unchanged. Important uncertainties on politics and geopolitics remain to be solved, so today’s decision is a prudent one. We maintain our view that the CBRT will start the gradual easing cycle towards the end of the year, but the expected disinflation could bring it forward.

May 31, 2019

Turkey | The recession is over but risks are alive

Turkish Economy contracted by 2.6% in annual terms in 1Q19. The economy is now technically out of the recession as the quarterly growth in seasonally and calendar adjusted terms turned into positive by 1.3% after the decline of three previous consecutive quarters. We maintain our GDP growth forecast at 0.3% for 2019.

May 14, 2019

Turkey | “Technical recession” is over but risks are alive

IP contracted by 2.2% yoy in calendar adjusted terms in March (-4.4% Consensus & -4.6% BBVA Research). Our monthly GDP indicator nowcasts a yearly contraction of 1.7% in March (96% info) and 1.6% in April (47% info). A prudent policy mix remains key to maintain the recovery trend alive and avoid a “W” pattern.

May 6, 2019

Turkey | Inflation surprised on the downside

Consumer prices increased by 1.69% in April, even lower than the minimum estimate shared in the consensus, leading the annual figure to fall to 19.5% from 19.7% in March. Despite the recent currency depreciation, thanks to the base effects consumer inflation will likely fall rapidly after June, but reverse in the last 2 mon…

May 3, 2019

Turkey | An Inflation-Forecast Targeting Regime

The Central Bank of Turkey (CBRT) published last Tuesday its latest inflation report. We believe rather than opening the door to a tighter monetary policy, the CBRT is moving to Inflation Forecast Targeting (IFT) framework since the Governor stressed the change of words as a “structural approach” rather than a “short term s…