ISTANBUL (Reuters) – Turkey’s economy is expected to contract this year for the first time in more than a decade as the coronavirus pandemic and related restrictions hit demand, but will bounce back next year, according to a Reuters poll published on Friday.
The median forecast in a July 21-23 survey of 42 economists in and outside the country was for a contraction of 4.3% in 2020, with drops in the second and third quarters of 12.2% and 3.1% respectively.
But the Turkish economy is expected to grow next year by 4.5%, according to the median forecast.
“We are seeing a U-shaped recovery in the Turkish economy right now … However, the uncertainties about a possible second wave of the outbreak necessitates a cautious approach to these economic recovery scenarios,” said Enver Erkan, economist at Tera Yatirim.
There are downside risks to growth next year, Erkan said, adding that tensions between the United States and China will have an impact too.
“I am not saying everything will be alright in 2021, we will be in a process of changing back,” he said.
The government had forecast 5% economic growth this year before the coronavirus outbreak and has since maintained the economy could still grow this year, following a robust 4.5% expansion in the first quarter.
But economic activity declined sharply in the second quarter as Ankara shut schools and some businesses, closed borders and adopted weekend lockdowns to slow the spread of the coronavirus. It has started taking steps to re-open the economy since June.
POLICY RATE
Turkey’s economy last contracted on an annual basis in 2009, by 4.7%. From 2010 to 2018, its average growth rate was more than 5% thanks mainly to a construction boom driven by cheap capital following the global financial crisis.
A currency crisis in 2018 was set off by concerns over central bank independence and tensions between Ankara and Washington. That led to three straight quarters of economic contraction and a modest annual growth rate of 0.9% last year.
Since last year, the central bank has cut rates to 8.25% from 24%, at first to pull the economy out a recession and later to counter the impact of the coronavirus pandemic.
In the poll, economists predicted the central bank would cut its policy rate to 8.00% by the end of this year.
It has bought up government debt at record levels since the end of March in the face of the outbreak. Economists have said the bond buying scheme and use of reserves to boost the Turkish lira have left the central bank with less room to manoeuvre.
“(The central bank moves) bears the risk of raising inflation, further deteriorating investor confidence and triggering another balance-of-payments crisis,” Allianz said in a note.
Allianz predicts Turkey will return to its pre-crisis level of GDP in mid-2022.
Inflation, which has hovered around 12% the last few months, was expected to decline to 10.2% by the end of the year and to 9.9% by the end of 2021.
The current account balance, which recorded a rare surplus last year as the economy slowed, has since returned to a deficit. The deficit is expected to stand at 2.3% of GDP this year and next, according to the poll.
(For other stories from the Reuters global long-term economic outlook polls package:)
(Polling by Manjul Paul in Bengaluru; Writing by Ezgi Erkoyun; Editing by Alison Williams)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
