TR Economy & Updates

[dBSPL]

The CBRT blew up Citibank' short positions. lol

https://twitter.com/i/web/status/1694693984822522062

Meanwhile, a very sharp sales wave came in the stock market. After the interest rate decision, volatility increased excessively and after short selling positions were exploded, the direction of the stock market was sharply downward.

After the election, the markets, which had a serious rally with a 70% increase in TRY value until the second week of August, have experienced a price correction of around 5% in the last week. These corrections are expected to last until the medium-term economic programme in September and the stock market is in a process of accumulation and therefore overbought technical indicators may cool down.

With the interest rate decision above expectations, the Banks index increased by over 8% (no surprise for me, I had taken a position accordingly). Strong trends usually start with banks and are supported by holding and large industrial papers. On the other hand, banks were the reason why the sharp decline in the stock market today seemed lower on the basis of basic indices. Shares on the sideboards, and energy stocks, which are very popular among the public at the moment, lost serious blood.

In addition, the sharp decline in the dollar caused the BIST-100 index to jump in dollar terms. Reaching the $290 level, if the index can climb to the $300 level, the new target will be the $320 which we dont seen last 5 years.

In summary, there is not a very negative atmosphere in the markets, high inflation and positive expectations in the 3rd quarter balance sheets are among the reasons that support this atmosphere.

 

[Zafer]

I prepared a table of Turkiye's GDP in 5 years intervals with the ranking and the population of the country. We reached the peak in 2013 with 16th place and it continued for two more years. Thereafter, it's downhill. And that is while continually growing in population.

(1970 and 1975 is from UN, the rest is from IMF data)

YEAR	GDP(Nominal $ bn)	World Ranking	Population(millions)
1970	24.4	20	34.7
1975	62.7	18( ↑2 )	39.1(+4.4mil)
1980	96.6	21( ↓3 )	43.9(+4.8mil)
1985	92.8	22( ↓1 )	49.2(+5.3mil)
1990	207.5	19( ↑3 )	54(+4.8mil)
1995	233.6	24( ↓5 )	58.5(+4.5mil)
2000	274.3	21( ↑3 )	63.2(+4.7mil)
2005	506	17( ↑4 )	67.7(+4.5mil)
2010	776.6	17	72.1(+4.4mil)
2015	864	16( ↑1 )	77.7(+5.6mil)
2020	720	20( ↓4 )	83.6(+5.9mil)
2022	905.5	19( ↑1 )	85.3(+1.7mil)

Totally depends on exchange rate which can fluctuate depending on international politics. You shovel a good interest rate to lenders mouth and currency rate stays low and you seem to look good while you can only produce tomatoes and you are in endless debt. Türkiye has low debt and $33k PPP GDP today while Greece has $32k and sitting on piles of debt. Türkiye is way better today.

 

[B_A]

Totally depends on exchange rate which can fluctuate depending on international politics. You shovel a good interest rate to lenders mouth and currency rate stays low and you seem to look good while you can only produce tomatoes and you are in endless debt. Türkiye has low debt and $33k PPP GDP today while Greece has $32k and sitting on piles of debt. Türkiye is way better today.

If become a vassel of American ,they can have 280% debt to gdp without collapse

 

[dBSPL]

It is a fact that the fixed wage earners are being crushed under inflation. Especially the situation of those who do not have an asset base among the retired is very sad. High inflation and the difficulty in accessing micro-credit for low-income citizens are seriously straining the living standards of the middle and lower income group. The more ironic part is that they are not even the main segment driving import-based inflation.

In a report I read recently, it seemed certain that the passenger car SCT revenue for 2023 alone would exceed 350 billion liras. One of the biggest tax revenue of the state comes from car sales, probably first one. Due to high inflation and rapid convertibility into cash, the automobile has become the main investment instrument, which is downright absurd, but seems this is OK, for the state.

On a more micro scale, it is possible to see this in the trade of every dollar-based product. A 5 per cent loss of the dollar will return as import volume. This is one of the main problems. Because this has almost become the main investment tool. For this, and if officially erdonomics is left for another spring, the dollar needs to stabilise 'without being suppressed'. The market needs to be convinced of this.

While it is necessary to direct savings to investment, enterprise set-ups or, if there is no such infrastructure, to operate as an investor in existing companies through the BIST in the simplest way, or, to bonds if there is less risk tolerance: As long as we direct it to import-based trade, it will not be easy to rein in this inflation trap. And if you look at the current reports, we will continue to live with high inflation until 2026 at best.

In an environment of high inflation, savings can be invested in foreign currency to prevent them from melting. The stability of the currency may limit the appetite for risk and returns below inflation may limit the impact here. The other issue is to act on import-based goods and commodities. Unless you can limit this path, it is difficult to get results no matter how much you close the first one. Therefore, the government should be careful in its economic policies about which doors to open for savers and which doors to make dangerous. This will determine how soon we will recover or how long we will suffer.

Of course, none of this is investment advice, but the opinion of a layman. I would also like to say that despite these negativities, I expect that we will return to a strong growth performance starting from mid-2024. Production-based growth is our only way out. And this is not only about the steps we will take, the conjuncture is also very favorable for this, and I hope we will not miss this window of opportunity.

 

[B_A]

It is a fact that the fixed wage earners are being crushed under inflation. Especially the situation of those who do not have an asset base among the retired is very sad. High inflation and the difficulty in accessing micro-credit for low-income citizens are seriously straining the living standards of the middle and lower income group. The more ironic part is that they are not even the main segment driving import-based inflation.

In a report I read recently, it seemed certain that the passenger car SCT revenue for 2023 alone would exceed 350 billion liras. One of the biggest tax revenue of the state comes from car sales, probably first one. Due to high inflation and rapid convertibility into cash, the automobile has become the main investment instrument, which is downright absurd, but seems this is OK, for the state.

On a more micro scale, it is possible to see this in the trade of every dollar-based product. A 5 per cent loss of the dollar will return as import volume. This is one of the main problems. Because this has almost become the main investment tool. For this, and if officially erdonomics is left for another spring, the dollar needs to stabilise 'without being suppressed'. The market needs to be convinced of this.

While it is necessary to direct savings to investment, enterprise set-ups or, if there is no such infrastructure, to operate as a partner in existing companies through the BIST in the simplest way, to bonds if there is less risk tolerance: As long as we direct it to import-based trade, it will not be easy to rein in this inflation trap. And if you look at the current reports, we will continue to live with high inflation until 2026 at best.

In an environment of high inflation, savings can be invested in foreign currency to prevent them from melting. The stability of the currency may limit the appetite for risk and returns below inflation may limit the impact here. The other issue is to act on import-based goods and commodities. Unless you can limit this path, it is difficult to get results no matter how much you close the first one. Therefore, the government should be careful in its economic policies about which doors to open for savers and which doors to make dangerous. This will determine how soon we will recover or how long we will suffer.

Of course, none of this is investment advice, but the opinion of a layman. I would also like to say that despite these negativities, I expect that we will return to a strong growth performance starting from mid-2024. Production-based growth is our only way out. And this is not only about the steps we will take, the conjuncture is also very favorable for this, and I hope we will not miss this window of opportunity.

I think this 10 years is our last chance to become rich country before population become too old.

At least we are in a better position than China now.

The only problem are the trade deficit and energy import and high tech industry.

We need export TOGG crazy like TB2

 

[Rodeo]

Totally depends on exchange rate which can fluctuate depending on international politics. You shovel a good interest rate to lenders mouth and currency rate stays low and you seem to look good while you can only produce tomatoes and you are in endless debt. Türkiye has low debt and $33k PPP GDP today while Greece has $32k and sitting on piles of debt. Türkiye is way better today.

How do you correlate foreign exchange rate and technological development? Is there a country that became prosperous while having higher and higher FX rates and higher inflation? And where do you put price stability in the picture?

Türkiye is way better today.

Compared to what or when? If you mean we are more developed, we can produce more etc, then of course we are better today. It's been decades. Everyone is better. Every country gets more technologically advanced. But if we're speaking relative to other countries(more relatable countries than small Greece), then it's debatable.

The low debt to GDP rate is not necessarily a good thing. It tells you that you either lack the projects to grow or your inability to attract cheap credits for investments. It's the latter and it's not for the lack of want. If we could get the money we would fund the projects and have higher debt to GDP ratio.

 

[Zafer]

How do you correlate foreign exchange rate and technological development? Is there a country that became prosperous while having higher and higher FX rates and higher inflation? And where do you put price stability in the picture?


Compared to what or when? If you mean we are more developed, we can produce more etc, then of course we are better today. It's been decades. Everyone is better. Every country gets more technologically advanced. But if we're speaking relative to other countries(more relatable countries than small Greece), then it's debatable.

The low debt to GDP rate is not necessarily a good thing. It tells you that you either lack the projects to grow or your inability to attract cheap credits for investments. It's the latter and it's not for the lack of want. If we could get the money we would fund the projects and have higher debt to GDP ratio.

I would rather have organic growth than growing on debt.

Not all countries develop technology. Greece for exemple, nada. Same olive, same feta, same donkey, same Onasis, nothing added. Not to stir a debate but good example.

Türkiye has low debt, developed industry, high quality real estates, educated people, developed in all departments. Still 5 more years and we will have a more developed industry provided we keep on course.

 

[Rodeo]

I would rather have organic growth than growing on debt.

Every country grows on debt. You cannot finance your projects with the very little profit you're making in a cut-throat competitive market. That would be like you running on your feet in a race when your rivals have their cars zooming past you.

 

[Zafer]

Every country grows on debt. You cannot finance your projects with the very little profit you're making in a cut-throat competitive market. That would be like you running on your feet in a race when your rivals have their cars zooming past you.

Well, there are few prodcuts that we can compete well one of which is drones. And the defence industry is likely to grow a lot bigger. We are doing our own thing there. If you can focus on science and technology you don't need debt. Another 5 years and we can possibly have taken a big leap; from chips and displays to space rockets and all.

 

[B_A]

How do you correlate foreign exchange rate and technological development? Is there a country that became prosperous while having higher and higher FX rates and higher inflation? And where do you put price stability in the picture?


Compared to what or when? If you mean we are more developed, we can produce more etc, then of course we are better today. It's been decades. Everyone is better. Every country gets more technologically advanced. But if we're speaking relative to other countries(more relatable countries than small Greece), then it's debatable.

The low debt to GDP rate is not necessarily a good thing. It tells you that you either lack the projects to grow or your inability to attract cheap credits for investments. It's the latter and it's not for the lack of want. If we could get the money we would fund the projects and have higher debt to GDP ratio.

Everyone had low debt to GDP when they are growing.

See the S.Korean and every other rich countries

Japan debt to gdp only grow up suddernly after their economy fail in 1990s

 

[B_A]

Well, there are few prodcuts that we can compete well one of which is drones. And the defence industry is likely to grow a lot bigger. We are doing our own thing there. If you can focus on science and technology you don't need debt. Another 5 years and we can possibly have taken a big leap; from chips and displays to space rockets and all.

Yes our defence industry is surplus now .

The problem is our civil industry ,we import too many things from China.

 

[Rodeo]

Everyone had low debt to GDP when they are growing.

See the S.Korean and every other rich countries

Japan debt to gdp only grow up suddernly after their economy fail in 1990s

That does not negate my point. Sure, having low debt to GDP is good for future growth(potential wise) but lower debt to GDP does not mean you have good economy. Afghanistan, for instance, have 7% debt to GDP. Is Afghanistan a prosperous country?

Here are the 12 countries with the lowest debt to GDP ratio;

Are we aspiring to become one of them?

Yes our defence industry is surplus now .

The problem is our civil industry ,we import too many things from China.

The defense industry does not even make up 1.5% percent of the economy. It contributed $12.2 billion to $905 billion GDP last year.

 

[Xenon54]

I prepared a table of Turkiye's GDP in 5 years intervals with the ranking and the population of the country. We reached the peak in 2013 with 16th place and it continued for two more years. Thereafter, it's downhill. And that is while continually growing in population.

(1970 and 1975 is from UN, the rest is from IMF data)

YEAR	GDP(Nominal $ bn)	World Ranking	Population(millions)
1970	24.4	20	34.7
1975	62.7	18( ↑2 )	39.1(+4.4mil)
1980	96.6	21( ↓3 )	43.9(+4.8mil)
1985	92.8	22( ↓1 )	49.2(+5.3mil)
1990	207.5	19( ↑3 )	54(+4.8mil)
1995	233.6	24( ↓5 )	58.5(+4.5mil)
2000	274.3	21( ↑3 )	63.2(+4.7mil)
2005	506	17( ↑4 )	67.7(+4.5mil)
2010	776.6	17	72.1(+4.4mil)
2015	864	16( ↑1 )	77.7(+5.6mil)
2020	720	20( ↓4 )	83.6(+5.9mil)
2022	905.5	19( ↑1 )	85.3(+1.7mil)

Saw the ranking above earlier but didnt even bother replying, some people are so far into delusion its just not worth the waste of time.

 

[Bozan]

What does 60,000 lira get you in Turkey and what does 60,000 euro get you in Europe

 

[Xenon54]

Everyone had low debt to GDP when they are growing.

See the S.Korean and every other rich countries

Japan debt to gdp only grow up suddernly after their economy fail in 1990s

View attachment 60419

Oh god not this again, just for the record, developed nations can go that far into debt simply because they can afford it way better than underdeveloped nations, look at wold stats and there is a consistency on this, most developed nations seem more indebted than third world, does that mean people live there better?
Its not nominal debt alone thats important but also your estates, posessions and reserves, most developed nations have a good record in paying debt back making their credit rating good which is granting cheap loans, Turkey does not have such high debts because it simply can not afford it.

Not a single developed nation is at risk of defaulting as of 2022, and if you look at the list of top risky countries the higher ranks are filled with those that have higher interest rates.

 

[B_A]

That does not negate my point. Sure, having low debt to GDP is good for future growth(potential wise) but lower debt to GDP does not mean you have good economy. Afghanistan, for instance, have 7% debt to GDP. Is Afghanistan a prosperous country?

Here are the 12 countries with the lowest debt to GDP ratio;

View attachment 60426

Are we aspiring to become one of them?



The defense industry does not even make up 1.5% percent of the economy. It contributed $12.2 billion to $905 billion GDP last year.

1.0-20%is too low.We had about 40% debt to GDP that is health. about 30-60% is the best range. The G7(except Germany) is a bit too high now


2.So I said the problem is civil industry.We need to do as good as Koreans

 

[dBSPL]

It is very important that if a challenge is to be made, it can be in any area of life, you first have to know yourself and your dynamics very well, and you need people around you who will keep you away from the psychology that will put you in a world of mind that will turn your investments/actions into gambling. When the human mind creates a comfort zone that it does not need to get out of, it has the potential to cause more damage to the individual than anyone else can. Man is also his own enemy, instincts mostly tends to block your progress. If we broaden the scale and think about it at the level of the corporate entity, the same tendencies apply, but the consequences have the capacity to impact much more beyond the individual. Let alone state level...

The curve of monetary policies and the strategies that this brain trust is trying to move forward on are debatable, but CBRT President Hafize Gaye Erkan (the youngest finance professor in the USA), CBRT Deputy Governor Fatih Karahan (Amazon / Former Chief Economist), CBRT Deputy Governor Osman Cevdet Akçay (Yapı Kredi / Former Chief Economist) are probably the most liberal and high merit profile that can be created with the current government structure. When you consider the total human resources of our nation in absolute terms, they may not represent the peak point, but what I want to explain here is that one of the teams that may have the most opposite stance within the current dominant ideological tendencies and the dynamics of the government structure is currently directing the monetary policies of the country. You must be seeing the psychology they create around you and on social media.

Now the question is, why did we try to swim against the current for 5 years if the playbook was going to be returned to eventually? Worse, we incurred this trillion dollar cost and abandoned it with all its losses without getting any tangible results. Even a simple investor executes his strategy based on risk-reward ratios and end strategy with cuts losses if it doesn't work. The country's economy was gambled with, and when the hand reached the point where it could no longer be sustained, there was no more will. If there is something else, then someone explain why we got into this mess.

You can be sure that if one day tomorrow this team will be put at the door, that is, if a return will be attempted again before getting the full results, all these costs will multiply logarithmically. I am not saying that we should embark on an endless journey with Mehmet Simsek and his UK creditors, but merit-based and competitive braintrust on monetery policies, maximally independent of governments, should be sustained without creating a sheltered fortress for any tendency and without turning monetery policies into a gamble. In this way, continuity can be ensured, and it will not be necessary to cut losses in 5-10 year periods without reaping the fruits of the suffering.

Economics is essentially a small part technical and a large part psychological. So if I go back to the beginning, we have to know ourselves and our weaknesses.

 

[B_A]

Since 2013 riot we had a 10years full of troubles,some because of the policy and others because of outside.We almost wasted this 10 years in economy.I wish 2023 be an end of these.

 

[Rooxbar]

I fear that this change of course and the big hike in the policy interest rate may be allowed by Erdogan as a short-term or even a one-time disincentivizing tool against KKM. We will wait and see.

Also on a side note, comparing countries' debts and debt to gdp ratios on its own (esp. at times of monetary laxness that ensued the dot com bubble until 2009 and comparing that to the 80s and 90s, where free-floating money was much tighter in comparison), without any regard for structural differences, geopolitical loci, what percentage of debt is owed to whom and in what sectors, and a myriad of other factors, is a futile venture and has very little explanatory power.

 

[UkroTurk]

Central Bank Interest rates increased, USD dropped 7%


Madem en sonunda faiz çıkarıcaktın , bu milleti son beş senedir rezerv açığına dolarizasyona, enflasyona niye mahkum ettin. Hani faiz sebebti, hani enflasyon sonuçtu. Yahu nasıl bir ülkeyiz.

Merkez Bankası faiz kararını açıkladı

Merkez Bankası Para Politikası Kurulu, politika faizini 7,5 puan artırarak yüzde 25'e yükseltti. Faiz artışı piyasa beklentilerinin üç katı oldu.

www.dunya.com

Yabancılardan TCMB'nin para politikası kararına övgü

Türkiye Cumhuriyet Merkez Bankası (TCMB), enflasyonla mücadele kapsamında bugün tarihinin en güçlü adımlarından birini atarken, yabancı ekonomistler, söz konusu adımla birlikte TCMB'nin enflasyonu düşürme konusundaki ciddiyetinin net olarak anlaşıldığını ifade etti.

www.dunya.com

Foreigners praise the CB's monetary policy decision

While the Central Bank of the Republic of Turkey (CBRT) is taking one of the strongest steps in its history in the fight against inflation, foreign economists stated that with the said step, the seriousness of the CBRT in reducing inflation is clearly understood.