(Bloomberg) — Once the growth engine of Turkey’s $750 billion economy, consumers are setting their sights lower in the post-lockdown era.
After the coronavirus pandemic struck Turkey in mid-March, the government severely limited people’s movements at the expense of business activity, keeping most curbs in place until late May. The lifting of restrictions alone hasn’t been enough to bring the consumer economy back, while a second surge in new infections soon followed.
High-frequency indicators over the past few weeks gave a snapshot of an uneven and weak recovery even before new cases started to rise again in recent days. Lacking momentum, restarting the idled economy will be a challenge for Treasury and Finance Minister Berat Albayrak and his promises to deliver fast-track growth and jobs for the nation of 83 million people and around 5 million refugees.
Albayrak still maintains that positive growth is possible for 2020. By contrast, the median forecast in last month’s Bloomberg survey of economists was for a 3.6% contraction.
To jump-start activity, authorities have unleashed credit to the economy, with state banks offering negative real interest rates and long grace periods on new loans. Annualized lending growth is on track to set new highs after already hovering around 50%.
But figures that allow to track the economy in near real-time suggest Turkey has a long slog ahead as it winds up activity. After splurging in the early days of the Covid-19 pandemic, when people were hoarding basic goods and food, Turkish consumers began to dial back spending as job cuts or a policy of unpaid leave became common.
The rolling four-week average of credit card purchases — an indicator with a strong correlation to domestic demand — is barely catching up to levels seen a year earlier.
Data collected by Google show Turks have been reluctant to return to offices or go out and about even after restrictions were lifted from late May.
Much like elsewhere, online shopping has been one of the few bright spots in an economy reeling under restrictions on social mobility. Consumers wary of frequenting shopping malls leaned on e-commerce websites to shop for everything from basic needs to used cars.
Although online sales and credit card purchases appear to suggest a gradual revival in activity to levels seen last year, energy consumption is lagging far behind. One explanation is that most people employed in the services sector are still working from home, suppressing demand for refined fuel.
Plants and factories running at lower capacities are also eating into energy consumption. The current state of oil and power demand shows some sectors are more likely to be vulnerable to the lasting damage suffered by the economy even if the rebound were to continue despite the surge in new cases.
A resurgence of new coronavirus infections in Turkey could mean the threat is far from over.
Over 3,000 people tested positive during the weekend, the highest number in almost a month, following a period when authorities gradually reopened restaurants and cafes and resumed internal flights.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
