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March 15, 2019 www.intellinews.com I Page 2
Fallen star: First recession in Turkey for a decade
better-than-expected 2.6% y/y in full-year 2018. Private consumption shrank by 8.9% y/y in Q4 while gross fixed capital formation declined by 12.9% y/y. Government consumption grew by just 0.5% y/y.
Turkey’s annual GDP at current prices declined to $784bn in 2018 from $851bn in 2017 while GDP per capita for 2018 stood at $9,632, compared to a little over $10,000 in 2017.
Au revoir to the trillion-dollar dream
The country’s dream of achieving a trillion-dollar economy has been significantly set back. And the idea that many voters will use the end-of-March local elections as a referendum on President Recep Tayyip Erdogan’s 16-year-long rule —
with one key question being whether it was his unsound economic stewardship and undermining of central bank independence that led to Turkey’s credit-fuelled economy running off the rails and suffering a full-blown currency crisis — has strengthened.
Turks are especially feeling the pain because prior to the currency blowout, partly caused by deteriorating relations with the US that unnerved markets, they enjoyed an almost uninterrupted expansion that lifted the economy by an average of nearly 7% each quarter since late 2009.
“This is an indictment of Erdonomics and a direct consequence of a monetary policy in 2018 conducted in the interests of short-term political expediency rather than economic pragmatism,” Julian Rimmer, a trader at Investec Bank in London, was quoted as saying by Bloomberg.
The slowing momentum “is just a warning signal that the Turkish economy is going down
Russian Market Data Value
1M YTD
Equity Indices
RTSI
1,182
2%
11%
MOEX
2,458
0%
4%
MSCI EM
1,048
1%
9%
S&P
2,808
2%
13%
NASDAQ
7,631
3%
16%
DAX
11,587
4%
10%
FTSE
7,185
0%
7%
Commodities
Price, $
1M YTD
Brent
67.2
4%
24%
WTI
58.6
8%
29%
Urals
74.2
-4%
65%
Gold
1,296
-1%
1%
Silver
15.2
-3%
-2%
Nickel
12,930
5%
22%
Copper
6,409
4%
7%
Aluminum
1,873
2%
0%
Equity Indices
Value
Russia Sectors performance % YTD
1M YTD
USD/RUB
65.44
-2%
-6%
EUR/RUB
73.96
-2%
-7%
Russia sectors performance % YTD
Oil & Gas Utilities Financials Consumers Telecoms M&M RTS MOEX
5
3.7
13
16
14 10
10.5
8
0 5 10 15 20
Source: MOEX, BCS GM
source: MOEX, BCS GM
Sectors: % return YTD