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Turkey emerges from COVID-19-hit 2020 with 1.8% economic growth – TheChronicleHerald.ca

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By Ali Kucukgocmen

ISTANBUL (Reuters) – Turkey’s economy grew 5.9% in the fourth quarter https://tmsnrt.rs/3dVombP and 1.8% in 2020 as a whole, annual data showed on Monday, emerging as one of only a few globally to avoid a contraction due to the coronavirus pandemic.

Propelled by a burst of credit in mid-2020, fourth-quarter GDP grew 1.7% from the previous quarter on a seasonally and calendar-adjusted basis, the Turkish Statistical Institute said.

A surge in gross domestic product (GDP) growth in the second half of the year that surpassed Turkey’s potential rate was driven by a near doubling of lending by state banks to face down the initial wave of the virus.

While outperforming all emerging market (EM) and G20 peers except China, Turkey’s growth came at a price: The cheap lending accelerated a record drop in the lira, drew down the country’s foreign currency reserves and helped push inflation to 15%. Also, few jobs were created.

Graphic: Turkey grew in 2020 despite pandemic – https://graphics.reuters.com/TURKEY-ECONOMY/GDP-ANNUAL/oakperrkbvr/chart.png

The recovery was “unbalanced and ultimately exacerbated some of the country’s external vulnerabilities,” said Jason Tuvey, senior EM economist at Capital Economics.

Financial sector activity surged more than 21% last year, driving overall growth, the data showed. Tourism and other services activity dropped by 4.3% and the construction sector, an engine of growth in years past, shrank 3.5%.

The lira firmed to 7.351 against the dollar after the GDP data and was 1% stronger on the day.

The volatile currency tumbled last week after a rally that began in early November when Turkish President Tayyip Erdogan promised a new market-friendly economic era. A new central bank chief has since hiked interest rates, cutting credit dramatically.

Finance Minister Lutfi Elvan, appointed in November, said on Twitter Monday that Turkey would prioritise price stability this year. Analysts say the economy should expand by roughly 5% in 2021 despite tight monetary policy.

In a Reuters poll, GDP was forecast to have expanded 7.1% year-on-year in the fourth quarter of 2020, despite new curfews and curbs on the service sector to address a second COVID-19 wave, and 2.3% for the whole year.

Graphic: Turkey’s economy kept up hot growth in Q4 – https://graphics.reuters.com/TURKEY-ECONOMY/GROWTH/qmyvmwwzjvr/chart.png

World economies mostly contracted and tumbled into recessions last year, with emerging and developing nations shrinking by some 2.4% according to the International Monetary Fund.

The major EM economy has cooled in recent years https://tmsnrt.rs/3r40BSx from an average 5% growth rate in the last two decades. The rate plunged by 10.3% annually in the second quarter as the pandemic bit, but rebounded sharply by 6.3% in the third.

Ankara is considering lifting some of the latest virus restrictions as of this month.

Tuvey of Capital Economics said the shift in November to more orthodox policies helped Turkey avoid “a full-blown balance of payments crisis”, and he predicted a sustained recovery may not come until the second half of this year.

(Reporting by Ali Kucukgocmen; Editing by Jonathan Spicer, Daren Butler and Hugh Lawson)

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Britain is ‘bouncing back’ into the same old economy – The Guardian

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Britain is ‘bouncing back’ into the same old economy  The Guardian



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CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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