Summertime, when the livin’ ain’t easy
The YouTube broadcasts of a Mafia boss Mr. Sedat Peker are still creating tremors in Turkish politics, as each installment brings new charges and new persona into the plot. The recent broadcasts have focused on AKP members receiving kickbacks and the illicit weapons trade to fundamentalist entities in Syria.
The broadcasts are watched across the political spectrum and appear to have created even more grumblings in a restless AKP. There are claims of AKP members and police feeding information to Peker. Some of his allegations are also being investigated. The party is unhappy with Interior Minister Mr. Suleyman Soylu, who won’t resign. Will Erdogan sacrifice him?
Polls continue to show declining support for Erdogan and AKP+MHP. All these being said, we don’t expect headline-making developments in Turkish politics over the summer months. The dynamics are glacial, but also irreversible. Our base-case scenario entails an end to the Erdogan Age, but how and why, we still don’t know.
Amidst conflicting signals, a majority of experts concur that Erdogan desperately wants to cut a deal with Joe Biden. Yet, he is not ready to part with his precious S-400s – yet. Can there be a compromise? What will Biden do if Erdogan clings to his beloved toys? We share our preliminary views.
Manufacturing PMI, the overall index, slipped to below 50 in May, while the trade balance, according to preliminary data, registered another hefty --$4.1 billion—deficit. As regards the latter, part of the answer as to why the trade deficit is still not shrinking, appears to be the ongoing deterioration in terms of trade.
In his meetings with investors, CBRT Governor Kavcioglu called rate cut expectations “unjustified” and that “they should disappear”, which may be deemed encouraging perhaps, but at this point it takes more than defensive words to place monetary policy on the right course, and stop the debilitating decline in TL.
Cosmo claims with temerity that the CBRT can’t cut rates this year. His reasoning is outrageous, but worth a read as an example of poor economic analysis.
Now read on...
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