Moody's Revises FY GDP to 11% from 9.2%, but Keeps Outlook Negative

LOCAL NEWS

• Moody’s revises Turkey’s FY21 GDP up to 11% from 9.2% & 4% in 2022. Says Turkish banks and large corporations (main borrowers abroad) are well protected vs currency depreciation.
  • Notes the banking sector has a balanced FX position, including foreign FX deposits abroad of $43bn. Also affirmed its B2 rating; negative outlook, but said it could return to stable if the currency stabilised and maturing debt continued to be rolled smoothly with a change in monetary policy focused on re-anchoring expectations
• Opposition mayor Imamoglu reveals true cost of living in Istanbul has risen by 50.18% in 2021 vs 21.31% put forward by the CBRT for the entire country.
  • This independent study was noted yesterday, but not in connection with the opposition. CBRT data also places housing inflation at 32.6% y/y as of October, but many estimates place that number much higher, while rental prices have risen 71.6%, Petrol 109.72%, sugar 40%, flour 109.14% & sunflower oil 137.59%.
  • The article notes that these numbers support opposition CHP leader’s statements that Turkstat is hiding the true numbers when they barred Kilicdaroglu from entering the building last week
• Defence Industry Head Ismail Demir says Turkish Bayaraktar drones will be delivered to Ukraine as planned, despite warnings from Russia. Notes, however, that this has nothing to do with the tensions in Crimea
• Lira’s steep depreciation triggers fuel crisis in Northern Cyprus with many stations running out of petrol as the two main suppliers said they would temporarily decrease sales.
  • Turkish Cypriot PM called on fuel stations not to sell fuel to Greek Cypriots. President Tatar said fines would be imposed on Greek Cypriots for buying Turkish fuel to deliberately make the situation worse

Data:

• 1430 Nov Cash Budget Balance, -5.2bn prior