Country Insights

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​Istanbul elections: Final words
TURKEY - In Brief 20 Jun 2019
With 4 days left to go to the crucial Istanbul municipal re-elections, I wanted to gather all the poll evidence and answer FAQs.There are other issues on the horizon, such as Bloomberg news of Washington policy establishment mulling what type of S-400 sanctions to levy on Turkey, and TRNC declari...

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An unstable equilibrium
TURKEY - Report 16 Jun 2019 1 response
Our political thesis, which also has a strong bearing on the economy, can be summed up in one sentence: “It’s such a mess that things will probably get better”. In terms of Turkey’s purchase of S-400s, the die appears cast, yet, underneath the surface, there is heavy shuttle diplomacy and hectic ...

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​Erdogan wows to take delivery of S-400s
TURKEY - In Brief 12 Jun 2019
According to state-owned Anatolian Agency, President Erdogan rebutted threats by US Acting Secretary of Defense Patrick Shanahan during his address to party caucus on Wednesday: “Turkey has already bought the Russian S-400 missile defense systems, President Recep Tayyip Erdogan said on Wednesday,...

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MPC: Better safe than sorry
TURKEY - In Brief 12 Jun 2019
The Monetary Policy Committee left the short-term rates unchanged today in line with the expectations, including ours (see chart). In the past day or two, there had been some speculation that the CBRT could be tempted to ease rates today, given the relative stability in the lira and strengthening...

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​Final curtain in S-400 crisis
TURKEY - In Brief 10 Jun 2019 1 response
I must warn my audience that political uncertainty is escalating very rapidly to the stratosphere, while financial markets are unusually calm.This brief is dedicated to the alarming developments at the S-400 front, but according to a new ORC poll, in Istanbul candidates are head-to-head, raising ...

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​Post-Eid update
TURKEY - In Brief 06 Jun 2019
Friday isstill administrative holiday in Turkey, but markets will be open, hence I wanted to update our readers on three matters of import. While the focus of investors may be on S-400s and to a lesser extent on Istanbul elections, it is important to begin with the growing humanitarian crisis in ...

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Another ​benign inflation print thanks to food prices, as stickiness continues
TURKEY - In Brief 03 Jun 2019
Consumer prices rose by a lower than expected 1%, m/m, in May (consensus: around 1.3%), with the 12-month rate thus easing to 18.7% from 19.5% in April. Monthly Domestic-PPI inflation was 2.7%, on the back of a weaker lira and higher energy prices, but given last year’s elevated base, the 12-mont...

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S-400 saga continues
TURKEY - Report 02 Jun 2019 1 response
Amidst a torrent of contradictory news, the only concrete progress in S-400 crisis is a summit between Presidents Erdogan and Trump at the upcoming G-20 meetings at end-June in Osaka, Japan. Yet, we surmise Ankara may be inching towards postponement of delivery. At home, the Istanbul race is l...

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Recession over -- for now
TURKEY - Report 31 May 2019
Broadly in line with expectations, the Turkish economy contracted by 2.6% annually, but expanded by some 1.3% sequentially in the first quarter. While the latter figure is somewhat stronger than our expectation, this is a technicality of sorts that stems from the difficulty of replicating Turksta...

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Between a rock and a hard place
TURKEY - Report 26 May 2019 1 response
The politics section opens with a summary of the US-Iran tensions and the flare up in Idlib to put Turkey’s regional dilemmas in context. The ever-changing features of the Middle East kaleidoscope will likely force President Erdogan to change policy and make sacrifices eventually, but that discus...

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Geopolitical risks rise further
TURKEY - Report 19 May 2019
US-Iran tensions, the exploration controversy in waters surrounding the divided island Cyprus and new attacks on rebel positions in Syria’s Idlib Province compound Turkey’s political woes. We consider only Idlib a serious problem for national security and for AKP’s chances of taking Istanbul back...

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Gegen Die Wand
TURKEY - Forecast 10 May 2019 1 response
Growth may have sequentially moved to moderately positive territory in Q1, after sharp contractions in the previous two quarters, thanks to substantial fiscal spending and a surge in state bank lending. But this relative pick-up is entirely transient, we think, as the reality on the ground, funda...

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​Istanbul elections- Take 2
TURKEY - In Brief 07 May 2019 2 responses
High Election Council (HEC) annulled Istanbul mayoral vote by a 7-4 decision, opening the way for re-election on 23 June. Only mayor’s office will be on the ballot, with borough and Istanbul municipal assembly results now finally certified. Mayor-elect (CHP) Ekrem Imamoglu was “defrocked” at once...

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Istanbul rerun is much more likely now
TURKEY - Report 05 May 2019
Despite a near-consensus local view on High Election Council (HEC) ruling to annul Istanbul elections, we steadfastly stood by our scenario of President Erdogan conceding it to mayor-elect Mr. Ekrem Imamoglu (CHP), primarily in the absence of his personal involvement in the bitter media battle be...

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Clothing, transportation drive inflation lower
TURKEY - Report 03 May 2019
In April, consumer prices rose by 1.7%, m/m, notably lower than the market consensus of around 2.3% (and our forecast of just over 2%), taking the 12-month CPI inflation down to 19.5% from 19.7% in March. But domestic-PPI inflation showed a strong monthly increase of 3%, on the back of a weaker l...