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place in the wake of the summer 2018 lira crisis that sent import prices skywards and, let’s not forget, caused severe economic pain for ordinary Turks. The three family collective ‘cyanide’ suicides that Turkey lately experienced in less than two weeks were attributed to hardship. Rather than talk about the economic mismanagement that led up to such tragedies, officials instead have sought to blame the easy availability of cyanide. How quickly flows of credit let loose by the opening of the loan taps will reach those at the bottom of the social pyramid is in question.
Imamoglu pursues eurobond. Istanbul mayor Ekrem Imamoglu said he has obtained a €110mn loan from Deutsche Bank, but it is unclear whether that money will arrive in Turkey. It could instead detour directly to foreign suppliers building metro lines. Imamoglu, complaining that Turkish state banks have shut out the Istanbul municipality since his victory over Erdogan’s candidate in the business and cultural capital’s June revote, also confirmed he is seeking Treasury approval to sell eurobonds. Where Turkey’s concerned, there’s been no discernible change in attitudes to external borrowing by successive administrations since the 1950s, though the financiers may vary. It appears that Erdogan’s former financiers may be getting ready to finance Imamoglu.
Although Erdogan still has the ability to access some financial lifelines, including various unidentified inflows, the likelihood of him curing his capital inflows headache does not seem to be on the horizon.
2.2 Official data suggests recovery
The Turkish economic recovery has just about reached the bottom of an upright on a “U” and the question is now whether that “U” can be turned into a “V” by the Erdogan administration’s attempt to aggressively pump credit.
Take it or leave it, that is one interpretation of Turkey’s latest economic situation following the release on December 2 of the country’s official third-quarter GDP figures, showing an expansion of 0.9% against a market consensus expectation for 1.0%.
“A little disappointing in the end—not quite the V-shape that some had predicted,” Timothy Ash at Bluebay Asset Management responded to the data announcement in a note to investors.
Piotr Matys of Rabobank: “The key issue for me is that there is still not that much confidence among households and corporates.”
As a result of the latest loan stimuli cycle, imports jumped 9.2% in November,
7 TURKEY Country Report December 2019 www.intellinews.com
