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Opinion
April 19, 2019 www.intellinews.com I Page 20
officially contracting — month on month, it fell
to 31.83mn from 31.96mn — since the TUIK’s perception of unemployment does not include people who have not searched for jobs in the past three weeks even if they are ready to work.
There seems little prospect that Turkey’s unemployment rate will improve before July or August at least due to the recession-hit country’s contracting GDP, Tatha Ghose of Commerzbank told Reuters.
Seasonal jobs in tourism — one area Turkey is picking up thanks to the weak Turkish lira — and agriculture will help the headline figure to fall starting from April-May, but most probably not the seasonally-adjusted figure which the markets follow.
Cheap veggie, expensive PPI
Although the markets were happy as recently as March to buy the government’s line suggesting that the cheap veggie stalls set up by state officials to head off alleged price gougers (and swing a few votes) have helped to curb food inflation, the TUIK’s latest data release on agriculture producer price inflation (PPI) show
a March rise in official agriculture PPI. That means the PPI figure went up for five straight months. The March gain was clocked at 27.33% y/y, compared to 25.79% y/y in February. Last November, the figure was recorded at 14.37% y/y.
TUIK’s latest data on poultry and milk products, released on April 12, showed the deterioration also continued in food production.
Separately on April 15, central government budget data showed that the deficit continued to grow, albeit at a relatively limited pace compared to the first two months of 2019. It was up 21%
y/y to TRY24.5bn in March. The cumulative
deficit grew by 77% y/y to TRY36.1bn in Q1 as
the pre-election boost arranged in expenditures outmatched early transfers to the state
budget from the central bank and other public institutions.
Also on April 15, data from the Automotive Manufacturers Association (OSD) showed that vehicle production continued to worsen in March. Vehicle production fell by 17% y/y to 132,189 units in the third month, causing the Q1 cumulative contraction to hit 15% y/y, with output at 361,156 units.
The domestic automotive market contracted by 45% y/y to 90,888 units in Q1 while exports fell by 7% y/y to 320,213 units.
Doesn’t add up
Back to Washington, where Albayrak, under heavy bombardment from analysts and investors who keep saying his economic plan doesn’t add up, continues to seek sufficient financing.
“The big question for foreign investors and for Turkish households is whether the lira is still an investable currency. In our opinion the reform package did not answer that question,” Frank Gill of S&P Global told Reuters on April 15.
On April 4, however, Gill initiated a short-lived rally on the Borsa Istanbul after suggesting during a webcast that Turkey’s credit rating was not presently at risk of a downgrade.
Timothy Ash of BlueBay Asset Management, who is not fast to lose faith in the Erdogan administration and from September to March was quite keen to back its chances of staying on the economic rails, now ceaselessly highlights Turkey’s fragilities from every possible vantage point with growing frequency.
BlueBay was among the funds with which Albayrak held private meetings in London at the beginning of last September when he had an upcoming bold rate hike and the recent release of jailed US Pastor Andrew Brunson — crucial to improving that vital sentiment where relations with the US are concerned — in his gift bag.
Ash shared the details of the London meeting
as late as last month after he appeared to have offloaded his Turkey risks.