Turkey: ditch red tape in the Bosphorus
What’s the best way to boost Turkey’s appeal in the eyes of foreign investors?
Throw the red tape into the Bosphorus, say 200 companies polled by Ernst&Young. ‘Reduce government bureaucracy’ was ranked top of 18 bits of policy advice, followed by support for small and medium-sized enterprises and lower taxes. Last on the business people’s list? ‘Respect human rights’. Continue reading »
What’s the script for Turkey? doing nicely, or could do better?
In these difficult economic times, with disappointing jobs figures in the US and stagnation in the eurozone, the growth story of Turkey tells is a coherent one – or it would be, if all the country’s government signed up to it. Continue reading »
[chart] Turkey GDP: quick, quick, slow
So much for the T in Mist: Turkish GDP for the fourth quarter of 2012 was just 1.4 per cent – lower than consensus forecast and the lowest rate since 2009.
Overall it made for 2.2 per cent growth for the full year – a marked slowdown from the previous two years, when 8 plus per cent was the norm. [Chart after the break.] Continue reading »
Guest post: Turkey’s peace dividend
By Naz Masraff of Eurasia Group
Recep Tayyip Erdogan, Turkey’s prime minister, has had a very good week. On March 21, the Kurdistan Workers’ Party (PKK) announced a ceasefire; the next day, Israel apologized for an attack on a Turkish-led peace flotilla in 2010. The possibility of a solution to its Kurdish insurgency holds out the possibility of real benefits for Turkey through increased trade with Iraq, improved security and political calm. There is a less immediate payoff from the Israeli apology but it is a favorable signal, nonetheless, from a region where there has been little good news of late. Continue reading »
Turkish insurance: more deals to come
Reluctant customers
Turkey’s insurance sector could be heading for a period of consolidation following the announcement that Germany’s Allianz is to buy the non-life and pensions business of Turkey’s Yapi Kredi.
That deal makes Allianz Turkey’s biggest non-life insurer and largest private pension provider by portfolio size and the third largest life insurer. But analysts say there could be more deals to come – and plenty of opportunity for growth in an under-insured country. Continue reading »
Turkey: the economic consequences of a peace with the Kurds
Daniel Dombey in Istanbul and Funja Guler in Ankara
At least John Maynard Keynes waited a year after the conclusion of World War One to write his The Economic Consequences of the Peace.
In Turkey just a few days have gone past since the outlawed Kurdistan Workers Party or PKK declared a ceasefire and people are already predicting economic consequences – and they are a lot more positive than Keynes’s gloomy predictions for the post-Versailles world. Continue reading »
Turkey current account: a little lacking in the FDI department
So is this where Turkey ends up? Balance of payments figures out on Tuesday show that the country had a $5.6bn current account deficit for the month of January.
While broadly in line with expectations that seems to confirms a pattern some may find unsettling: a year of big falls in the deficit has come to an end, and the still hefty monthly total is overwhelmingly financed by portfolio funds rather than foreign direct investment. Continue reading »
Video: Turkey’s financing questions
There has been a sharp improvement in Turkey’s current account deficit – often cited as the biggest single point of concern for investors.
But in an FT video (below the break), Timothy Ash, head of emerging markets research ex-Africa at Standard Bank, explains to deputy emerging markets editor Jonathan Wheatley that the recent improvement is a one-off event and that funding for the deficit remains precarious. Continue reading »
Turkey: an awkward rebalancing
The plan is, in theory, to move from a 10-10-10 economy to a 5-5-5 one.
Not too long ago, Turkish officials were alarmed at an economy growing sometimes by an annual 10 per cent or more, with inflation to match and with a current account deficit at 10 per cent of Gross Domestic Product. It all looked unsustainable. Hence the push to bring inflation under control and limit the current account deficit, whilst maintaining reasonable GDP growth. Hence rough goal of 5 per cent growth, 5 per cent inflation and a 5 per cent current account deficit. Continue reading »
Turkey: the central bank and conflicting signals
Turkey’s central bank specialises in Solomonic decisions. Like the Biblical Jewish king, the bank’s approach to thorny monetary and financial questions is to give a bit to both sides in a dispute. The question, is, however, whether it cuts in equal halves. Continue reading »
Turkey’s current account: in better shape – for now
That was quite a drop.
Turkey’s current account deficit, seemingly all but out of control in 2011, plunged in 2012. According to central bank statistics released on Wednesday, the total fell from $77.2bn in 2011, just about the highest in the world outside the US, to $48.9bn last year. Continue reading »
Guest post: take care with plans to reform Turkey’s economic statistics
By Emre Deliveli of Hürriyet Daily News
Turkish inflation figures, announced on Monday, showed a 1.7 per cent month-on-month increase in January, much higher than market expectations of 1.1 per cent. In a striking jump, annual inflation rose to 7.3 per cent from 6.1 per cent in December.
A big contribution came from an unexpected big increase in food prices: Turkish food inflation is volatile and hard to predict. Continue reading »
Turkey: rising foreign debt burden
One of the more alarming numbers in Turkey is continuing its upward march. In a regular update on Friday, the country’s central bank said that foreign debt coming due over the next 12 months reached, as of the end of November, $143bn. The figure stood at $134bn 12 months before. Continue reading »
Turkey kicks off 2013 with grand ambitions and fewer ratings
Plans to proceed with a gigantic infrastructure project; a decision to dispense with the services of an international ratings agency; forecasts of continued growth – there is no mistaking that Turkey has kicked off the new year in bullish fashion.
The country’s headlines are currently dominated by the aftermath of the execution-style murder in Paris of three female activists of the outlawed Kurdistan Workers party, or PKK. But the context even for this is not unremittingly grim. Continue reading »
Turkey’s unorthodox monetary policies get a thumbs up
Fresh from receiving a gong that ranks him above his peers, Turkey’s top central banker has received a further vote of quiet confidence for his management of the country’s consumption -hungry economy.
Erdem Basci, recently chosen as Central Banker of the Year by The Banker, the FT’s sister publication, can now also point to a favourable review by Fitch Ratings for one of the complicated mechanisms with which he seeks to slow the economy down. Continue reading »
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