Reality versus perception
The Political Analyst issues three serious warnings, which are bullet-pointed below to make sure his message gets across:
• Signs of an impending Great Earthquake in Marmara Basin-Istanbul are proliferating.
• President Erdogan may be serious in his threat to invade North East Syria very soon, which would trigger Congressional sanctions.
• AKP is rapidly disintegrating, forcing Erdogan to change his ways or to double up.
The IMF left a sobering statement on Turkish Macro 101, which is very different than what Ankara and pro-government media are drumming up. We expect to see the government Medium-Term Economic Program this week, which is likely to make a very different reading than the IMF statement.
With all due respect, we do not make much of Governor Uysal’s relatively hawkish messages uttered in a speech to Ankara’s business community last week.
The week is packed with data releases (see calendar at the back). Based on preliminary data, we know that the August trade deficit should come in around $2.5 billion, on the back of very weak – around 1%-2% -- year-on-year increases in both exports and imports, which would mean that the 12-month rolling deficit should stay flat at $26.4 billion, thanks to strong base effects from last August.
On inflation, the “base effect” will rule as well, with 12-month CPI-inflation falling to below 10% in September. Specifically, despite some significant price hikes (e.g., transportation, energy), CPI-inflation should come in around 1.3% in the month, we forecast, taking the 12-month rate to 9.6-9.7%, which is broadly in line with the consensus.
The Cosmic Dude laments that the so-called “rebalancing story” is just a fairy tale, while political risks are not even mentioned in the Turkey story.
Now read on...
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