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March 11, 2019
Turkey | Sharp adjustment of domestic demand in 2018
Turkish Economy contracted by 3.0% yoy in 4Q18, slightly worse than expectations (-2.5% median vs. -2.2% BBVA Research). The economy technically entered into a recession as the QoQ contraction became deeper with -2.4% after -1.6% in 3Q18. We maintain GDP growth forecast at 1% for 2019 as recent impulses and base effects in the 2H19 may balance the poor performance of 1Q19.
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April 4, 2018
Turkey | Sticky Inflation
Consumer inflation recorded 0.99% (mom) in March, in line with the market expectation (1%) but higher than ours (0.75%) on the discrepancy due to surprising food inflation.Recent exchange rate depreciation, upward risks on growth and high inertia (backward and forward looking) obviously create upside risks for our year end 9% forecast.
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April 3, 2018
Turkey | GDP grew 7.4% in 2017
GDP grew by 7.3% (YoY) in 4Q17 above both the market consensus and our expectation (6.7%). The upward revision of the first three quarters and stronger than expected Q4 resulted in 7.4% yoy growth in 2017 (3.2% in 2016).We maintain our expectation that GDP growth may normalize to 4.5% in 2018 due to tightening financial conditions with some upside risks.
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September 8, 2017
Turkey: Activity accelerates further
Industrial production in July grew by 14.5% yoy (cal.adj.). Our monthly GDP indicator (GBTRGDPY index at Bloomberg) nowcasts 5.1% GDP growth for 2Q and hints even higher performance for 3Q. Considering also an acceleration in 3Q with both base impact and enhanced activity, we believe that the risks on our 5% GDP growth expectation for 2017 are clearly on the upside.
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September 5, 2017
Inflation: Outlook worsens on core dynamics
In August, consumer prices rose by 0.52%, higher than the consensus (0.1%) and even our estimate (0.3%). FX pass-through mostly on the recent appreciation of Euro, second round price effects and spill-overs from the narrowing output gap continued to be the factors behind. We expect the headline to stay close to 11% before it would fall to 9-9.5% at the end of the year.
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July 14, 2017
Turkey: May IP hints a more balanced outlook
Industrial production (IP) grew by 3.5% in May (calendar adjusted, YoY), signaling that economic activity maintains its momentum in 2Q17. Our monthly GDP indicator (GBTRGDPY index at Bloomberg) also confirms this with a growth rate close to 5% YoY by June (with 26% information so far).
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July 4, 2017
Turkey Monthly Economic Monitor | June
Recovery in IP continues with the support from both exporting and domestic demand oriented sectors. We expect the GDP growth in 2Q to accelerate even further, as early signals from May suggest a growth rate close to 6%. Turkish lira stabilized at 3.50-3.55 band as global and local factors balance each other and the CBRT maintains its hawkish tone
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June 5, 2017
Turkey Inflation: Worst is over but it’s early for complacency
Annual consumer inflation marginally fell for the first time after 6 months to 11.7% from 11.9% in April. Core inflation remained stable at 9.4% despite the ongoing exchange rate pass-through. We expect the headline to fall towards 11-11.5% band in June and remain at double digits before falling to 9% at the year-end.
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July 19, 2016
Turkey | A modest move as expected
The Central Bank reduced the upper bound of its interest rate corridor 25bps further to 8.75% and kept the lower bound of the interest rate corridor and the 1-week repo constant at 7.25% and 7.50% respectively. The decision was in line with the analyst expectations which had declined from the previous 50bps to a 25bps reduction following the heightened political volatility
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July 14, 2016
Turkey | Still Robust GDP Growth in 2Q
IP grew by 5.6% (WDA YoY) in May, beating the consensus estimate (4.1%). April-May production and demand side data pointed at a modest slowdown economic activity in 2Q16 especially in ex-auto items, partly confirming the earlier easing signals from the confidence indicators. We expect some moderation ahead but we maintain our 3.9% 2016 annual GDP growth forecast.
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