Economics
Macroeconomic Conjuncture Notes
OSTIMTECH Econ-Conjuncture Notes/2022/01
27 January 2022
NOTE-9: FIRST QUARTER INFLATION FORECAST FOR 2022
Changes in the exchange rate are directly reflected on the prices of imported core goods such as durable consumer goods. Moreover, changes in the exchange rate can also affect inflation through imported inputs (energy and other intermediate goods) used in production. This "exchange rate pass-through" effect of exchange rate changes on domestic prices of goods and services has the greatest impact on inflation. Considering the short-term effects of the recent implementation of the exchange rate-protected TL time deposit accounts to stabilize the exchange rate, it can be assumed that the exchange rate will move within a more predictable band in the next 3 months. Within the framework of the explanations below, even if inflation stays in the 40% range on an annualized basis, especially during the first quarter, it is foreseen to decline gradually afterwards and close the year at levels lower than the first quarter figures of 2022, especially with the strong base effect from December.
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22 December 2021
NOTE-8: POSSIBLE IMPACT OF THE FOREIGN CURRENCY HEDGED TL TIME DEPOSIT ACCOUNT SYSTEM ON FINANCIAL MARKETS AND THE TREASURY
It is imperative to evaluate the short-term positive effects of the exchange rate-protected TL time deposit accounts announced by the Ministry of Treasury and Finance, which have had a significant positive impact on the markets, as well as the significant medium- and long-term negative risks. In the light of the different scenarios discussed in this article, the burden on the Treasury that the announcement and the implementation, which sharply lowered the exchange rate and halted the flow to foreign currency, may create is considerable. Especially with the increase in the amount of funds in the new system after the stabilization of the exchange rate, the economy may be vulnerable to exchange rate shocks that would create a public burden in the medium-long term. Going forward, in parallel with the new system, the Central Bank's reserves should be sharply increased in the event of possible high-volume foreign exchange sales or capital inflows. In particular, the fact that foreign exchange accounts to be resolved according to the Central Bank Communiqué will be transferred to the Central Bank through commercial banks under the system is very positive.
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OSTIMTECH Econ-Conjuncture Notes/2021/07
19 September 2021
NOTE-7: AN ASSESSMENT OF THE MEDIUM-TERM PROGRAM (2022-2024)
An analysis of the targets of the MTP covering the 2022-2024 period suggests that the targets are internally consistent; however, the success in meeting the targets is to some extent dependent on economic and financial developments abroad. For these reasons, it is understood that inflation targets will be exposed to too many variables and that there may be difficulties in meeting the targets. On the other hand, due to the persistence of interest liabilities from previous years in the budget balance of the public sector and plans to increase budget expenditures more than revenues, it is not considered very feasible to reduce the budget deficit to 3 percent of GDP, which is among the international standards, and the MTP has been prepared for an average budget deficit of 3.2 percent in this period, taking these conditions into account. Regarding unemployment, it is observed that an employment policy has been developed based on productivity increases resulting from targeted increased investments in the industrial sector, falling labor wages in real terms in foreign currency terms and exploring new economies in global markets.
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OSTIMTECH Econ-Conjuncture Notes/2021/06
5 Mayıs 2021
NOTE-6: HOW HAS THE PANDEMIC AFFECTED THE WORKFORCE AND UNEMPLOYMENT?
According to data released on April 12, 2021 by TurkStat, the seasonally adjusted unemployment rate for February 2021 was 13.4%, while the employment rate was 43.4%. However, TurkStat had announced that the labor force data, which was previously announced as quarterly moving averages, would now be published as monthly data. The data for January and February 2021 was the first data released in this way. This analysis focuses on the course of labor force data from January 2020 to January 2021 and the impact of the pandemic on labor force data since March 2020, when it was first observed in Turkey. Youth unemployment and general unemployment rates are compared, and the impact of the pandemic on the employment of men and women is analyzed. In addition, non-agricultural employment and sectoral distribution of employment are also evaluated.
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Link: HOW HAS THE PANDEMIC AFFECTED THE WORKFORCE AND UNEMPLOYMENT?
OSTIMTECH Econ-Conjuncture Notes/2021/05
4 May 2021
NOTE-5: SECTORAL BREAKDOWN OF BANK LOANS IN THE MARCH-2021 PERIOD
The 30% expansion in the volume of cash loans in the last year has spread to most sectors, while letters of credit, an important instrument in financing foreign trade, increased by 19.2% in USD terms.
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Link: SECTORAL BREAKDOWN OF BANK LOANS IN THE MARCH-2021 PERIOD
OSTIMTECH Econ-Conjuncture Notesı/2021/04
1 April 2021
NOTE-4: BALANCE OF PAYMENTS DEVELOPMENTS IN 2020 AND JANUARY-2021
In 2019, for the first time since 2001, the current account posted a surplus of USD 6,759 million, or about 0.9% of GDP, while in 2020, the current account deficit was USD 37,765 million, which corresponds to about 5% of GDP. The main factors that led to the increase in the current account deficit in 2020, when the pandemic started to be experienced, were the increase in the foreign trade deficit from USD 16.8 million in 2019 to USD 37.9 million in 2020 due to the decrease in exports, a slight increase in imports and an increase in non-monetary gold imports.
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Link: BALANCE OF PAYMENTS DEVELOPMENTS IN 2020 AND JANUARY-2021
OSTIMTECH Econ-Conjuncture Notes/2020/03
08 December 2020
NOTE-3: MINISTRY OF TREASURY AND FINANCE ANNOUNCES CASH BALANCE FOR NOVEMBER
The Treasury cash (budget) balance posted back-to-back surpluses in November 2019 and 2020. In fact, this has generally been the case in previous years as well. However, a look at the 11-month cash balance reveals an increasing deficit. In fact, the cash deficit for the January - November 2020 period was 45.3% higher than in the previous (2019) period (probably due to the pandemic).
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Link: MINISTRY OF TREASURY AND FINANCE ANNOUNCES CASH BALANCE FOR NOVEMBER
OSTIMTECH Econ-Conjuncture Notes/2020/02
09 September 2020
NOTE-2: BUDGET REALIZATIONS IN JANUARY-JULY 2020
According to data from the Ministry of Finance and Treasury for the first 7 months of 2020, the budget deficit has more than doubled compared to the same period in 2019, driven by the COVID pandemic. Expenditures are rising much faster than revenues; in particular, the increase in tax revenues is mostly driven by indirect taxes. The primary balance is also running a larger deficit.
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Link: BUDGET REALIZATIONS IN JANUARY-JULY 2020
OSTIMTECH Econ-Conjuncture Notes/2020/001
17 Agust 2020
NOT-1: NOTE-1: WHAT KIND OF TREASURY BALANCE ARE WE FACING IN MID-2020?
Data from the Ministry of Finance and Treasury show that public financial balances have been in a serious deterioration in the first 7 months of 2020 due to the impact of the COVID pandemic. Central government revenues have declined due to the slowdown in economic activity, while expenditures have been on a rapid upward trend. The unfavorable developments in international capital movements specific to Turkey brought about a decline in the country's external debt and an increase in domestic debt.
You can access the rest of the review from the link below:
Link: WHAT KIND OF TREASURY BALANCE ARE WE FACING IN MID-2020?
