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TURKEY: Formally Enters Recession With Surprise Downward Revision

TURKEY
BulletEM BulletEmerging Market News
  • Q3 GDP data showed the economy formally entering a technical recession, with a second consecutive quarter of -0.2% growth – after the Q2 print was revised down from +0.1%. Annual growth hit 2.1% - lower than expected – and less than half the ~5% clip Turkey consistently posted before the pandemic.
  • Separately, the CBRT have posted their Bi-annual financial stability report, in which they point to rising confidence in both the TRY as well as the disinflationary path in Turkey. They see markets priced as in-line with the policy rate.
  • The themes and topics gel well with meetings said to have taken place earlier this week between the CBRT deputy governor and international investors in London, at which he said that the authorities are expected to intervene to a lesser extent in the future, with participation in FX declining over time. Akcay justified the ‘dirty’ float as being due to inefficiencies and deficiencies in the market – but there are no concerns with current valuations.
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  • Q3 GDP data showed the economy formally entering a technical recession, with a second consecutive quarter of -0.2% growth – after the Q2 print was revised down from +0.1%. Annual growth hit 2.1% - lower than expected – and less than half the ~5% clip Turkey consistently posted before the pandemic.
  • Separately, the CBRT have posted their Bi-annual financial stability report, in which they point to rising confidence in both the TRY as well as the disinflationary path in Turkey. They see markets priced as in-line with the policy rate.
  • The themes and topics gel well with meetings said to have taken place earlier this week between the CBRT deputy governor and international investors in London, at which he said that the authorities are expected to intervene to a lesser extent in the future, with participation in FX declining over time. Akcay justified the ‘dirty’ float as being due to inefficiencies and deficiencies in the market – but there are no concerns with current valuations.