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Renaissance chief economist expects another Turkish lira crash within two years
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Charles Robertson, the London-based global chief econo- mist at Renaissance Capital, reportedly expects Turkey to experience another lira crash within two years.
In an interview with Bloomberg, Robertson said: “My current scenario is that we go back to another boom-and-bust cycle, with interest-rate cuts in the second half of this year leading to strong credit growth in 2022, just ahead of the presidential election in 2023, and then we get another crash.”
He added: “We have seen so many times that [Turkish Presi- dent Recep Tayyip] Erdogan was persuaded that he has to do something. Each time, the cost has become higher and the gains have become more short-lived. You look at interest rates globally today and look where Turkey is. Every other main- stream emerging market has interest rates below 5% now, except Turkey.
“I don’t have high trust that Erdogan has learned his lesson. His comments just a week ago again suggests that, yes, he is being responsible for now, but as soon as he gets the chance
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Contents
Top stories
Russia’s top retail and tech companies join forces to hunt for innovations in the rest of the world 2 Ukraine-born startups raised more
than half a billion dollars in 2019 4 Russian video streaming platforms
gain speed 5 Cloud services take off in Russia 6 SEMrush to SEO success 8
Leaders 9
Russia’s internet giant Yandex
announces growing and more
diversified revenues in 2019 10 Russian telecom major Rostelecom misses on earnings in 4Q19, cash
flow solid 12
Investment 13
World Bank approves $35mn project
to modernise Kyrgyz tax administration and statistical system 13 Romanian online home decoration
retailer raises €3.5mn in bonds 14 Russian billionaires Abramovich, Gutseriev, said to invest in Telegram
crypto project TON 14 Russian fund Da Vinci Capital gets
€30mn from Germany’s DEG to invest
in Ukraine, Belarus and Kazakhstan 15
Fintech & E-commerce 16
Russian e-commerce major
Wildberries to add self-employed
vendor products to offering 16 Russian Dixy retailer to launch online sales with Ozon 17 Valuation of Sistema’s e-commerce
asset Ozon boosted to $1.8bn 17
Telecom 19
Makedonski Telekom’s net profit
up 6% y/y in 2019 19 Romanian telco Digi grows by double
digit rates in 2019 19 Russia could postpone 5G rollout
from 2022 to 2024 20
NIBs 21
and certainly ahead of the elections in 2023, you would expect Turkey to go on the credit-growth model again.”
Robertson also said: “Once again Turkey has got a choice. It still has a very cheap currency; it can go down an export-led model that will support its current account and bring in the dollars and euros that can be used for investment. I’d love to see the central bank be able to take inflation under control permanently through a long period of high interest rates and at the same time a cheap currency helping exports and helping re-balance Turkey’s economy away from consumption. That would be the better long term story for Turkey, but less excit- ing for growth. It is kind of a growth scenario of probably 3% or 4% a year, not 6% or 7% for a few years and then a crash.”
Reflecting on his outlook for Turkey, Robertson said: “I’d love to be wrong, for the sake of the Turks and their savings and their relative standing in the world. Turkey has an opportunity to change. Turkey is a well-developed industrial economy with a good, educated work force. It could be a solid – perhaps the best – growth story in the European time zone for the next 10 years with the right policies.”
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Russia’s top retail and tech companies
join forces to hunt for innovations in
the rest of the world
BAs Russia’s retail and tech sectors consolidate, the leading companies are turned their gaze outwards to hunt for
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new technology and innovation.
See page 2
Ukraine-born startups raised more
than half a billion dollars in 2019
In 2019, the venture capital and private equity funding volume for Ukrainian and Ukrainian-founded tech startups reached $544mn (up from $323mn in 2018 and $265mn in 2017), says AVentures Capital’s latest industry report ”DealBook of Ukraine”,
reports Adrien Henni of Ukraine Digital News. See page 4
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Charles Robertson says Turkey is back on a worrying road.