Page 15 - Turkey Outlook 2022

Cough it up

Banks only bankrupt when governments want them to bankrupt. Erdogan and
his officials are not seeking bank bankruptcies, but some cash injections are
required. The regime achieves this by exchanging some government papers
among the Treasury, the wealth fund (TVF/TWF) and public banks. The
owners of private banks have to cough up.

4.3 Industry

Current account surplus?

If you buy the official data, the surplus is there. The problem is that the regime
believes in its own fake data and then wonders how its currency is wildly
depreciating while the economy is producing such a surplus.

Let’s repeat: “Turkey’s export performance depends on demand conditions in
the EU, not on the value of Turkish lira.”

The story across 2021 suggested that Turkey’s exports were breaking records.
That was correct in USD-terms, with imports also breaking records. It is called
inflation.

Financial flows stopped; as a result, they are stable. There is not much hot
money left. The game is played out only among locals.

4.4 M&As

Outlook Turkey 2021: “We can add that a significant process of company
acquisitions—delayed by the Turkish government since the 2018 lira
crash—may be on the cards for 2021 as many of Turkey’s companies are
bankrupt while financial and economic conditions are tightening once again.”

The process did indeed begin in 2021. Foreign companies’ interest in Turkish
manufacturers remains on the rise. The main theme in the recent M&As seen
in Turkey centres on foreign buyers taking over the debt of indebted

15 Turkey Outlook 2022 www.intellinews.com