Let’s talk after the summit
The main story in the politics section is Mr. Erdogan’s visit to Brussels, where he will likely be grilled by EU and NATO leaders, while he finally says hello to old buddy Joe.
He is until immense pressure at home at the eve of this historic visit. He and his AKP+MHP alliance are slipping in the polls-even more than before. Marmara is on its way to become the second Dead Sea. His Interior Minister Suleyman Soylu has managed to become as unlikeable in the party as the former economy czar Albayrak. A formerly little-known Mafia boss, called Sedat Peker, is spilling his guts, re-writing the recent political history of Turkey from an angle that paints Erdogan and his buddies in the most distasteful colors. Covid-19 and the economy still offer him no relief. All this means that, he has got to return with a nice gift for voters and the party from Brussels.
As for the outcome of the Erdogan-Biden meeting, Turkey looks eager for a “deal” while Washington may have revisited its “ignore Erdogan” strategy. But what does exactly a “deal” mean? Over what time frame will it unfold? What will be its potential terms? Finally, of course, what is the bad scenario? We provide the answers inside.
Industrial production and retail indices dropped in April, over March, which we do not think is just about the lockdowns or transient. The unemployment rate also edged up quite sharply in April.
Cash budget yielded another reasonably strong performance in May, once we take into account the revenue that shifted from May to June, the details of which we will see in this week’s figures.
The IMF released its Article IV Staff Report over the weekend, which as usual makes very good reading. Unsurprisingly, much of what the Fund says is almost completely in line with our own thinking. We provide some highlights inside.
As for the upcoming attractions, we expect the MPC to stay put at this week’s rate-setting meeting, while we see the April current account deficit come in at around $2.4 billion.
Cosmo wonders if it is possible to concoct a new Turkey story? If it were, how would it sound like?
Now read on...
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