TR Economy & Updates

[POOTIN]

https://twitter.com/i/web/status/1453694425721417731

He said it again

 

[karajlo]

This is too little to be filling for hospital patient

sick people in hospitals have special diets

 

[Nilgiri]

Dont just focus on manufacturing goods, India can have 150 billion USD IT service export within a year @Nilgiri

https://www.business-standard.com/article/economy-policy/exports-of-software-services-up-2-1-to-148-3-bn-in-2020-21-rbi-survey-121092001318_1.html#:~:text="India's exports of software services,year," the RBI said.

Yup I expect this year total services export (not just software) to be around 230 billion USD...a new record....with software (IT) making the majority.

On goods side, India also will see a record year...it will break 400 billion USD level for first time.

So total exports will be around 630 billion USD (or somewhere in range of 600 - 650)...

...an increase from 530 billion set in 2019 (so annualised growth of roughly 9% over two years)

...and increase from 475 billion in 2020 covid shut down year....or a growth over one year of nearly 33%

But these numbers are still early/lackluster at this current frame of time. (to make any mid term analysis, forget long term)

The difference between 33% and 9% (annualised over two years) for example shows how much of the larger number is recovery from covid shutdown due to depressed base effect in 2020.

I have always said more years of consistent growth are needed (to see any real evidence of baseline trajectory) and also to see some deeper trends to actually analyse (such as competitiveness and productivity gains etc....very important to any economy).

This is what a number of members in this thread and forum do not seem to understand.

You need multiple years to see actual trends in things like exports.

One must (in short term analysis) always consider what is actually volumetric+physical (i.e real) versus price level (i.e inflation) driven.


Take manufactured exports ( one part of goods that is not straight up resource transfer but actually has human labour input):

If one exports 100 billion one year and 150 billion the next year. Some might jump for joy at 50 billion increase (and 50%) growth.

But what if you imported 90 billion the first year and then imported 140 billion the next year concerning inputs for these manufactured items?....and all of that was price level driven (i.e quantities imported remained the same).

In essence all the increase (in export) came from the price level increase of the imported inputs....in both cases you "value added" 10 billion by your labour and are stagnant on it.

This is what the article @UkroTurk 🚬 posted earlier indicates to some level.

For goods in general....the kind of thing you need to track over many years (to see if your own labour and factors of production are getting better) are things like:

(Export - import) = current account balance (in global currency like USD)

Then you take that balance in USD and factor in the USD inflation rate as well from reference year.

This should be done in every (goods) sector that uses human labour and time more intensively.

i.e are you actually getting more productive and competitive in the sector....rather than simply reporting/focusing one set of price increases.

Services sector here is different as generally it doesn't rely on too many imported inputs.

So in a way services export shows nearly the full value creation (exported)....compared to goods.

=========================================

Anyway this is the kind of thing that is actually debated and analysed here....because there is conducive (good faith) environment for it overall.

Certain other fora have entrenched themselves in extreme levels of utter hate and ignorance and thus do not have any actual resolution and understanding formed.

There are slavish/worship complexes and sycophancy in every "debate" there....on top of the hate country X, Y and Z at all costs.

Thus the vast bulk of them have driven away many if not most quality members and are unable to understand why their economy has to go for "bailouts" and its always the baddie gulfies and IMF etc doing it instead of the "higher than mountains" wumao-land.

A fundamental question of why "iron brother" does not provide the 3 billion alms instead of a GCC country that voted against them in FATF is simply not asked.....much less analysed in any serious manner.

This goes regarding the sycophants from the former eastern wing as well (ensconced there for complexes of their own - not reflective of their countrymen at large). Disgusting specific cretins in their case....there is reason why they scoped this place out, found it not to their liking (too much rationality, fresh beginning and clean air for their liking) and gone back to their open sewer.....they love that smell too much lol.

Everyone there likes to project what they actually are on others ....understanding is the enemy of this emotional process....and they grow addicted to it and double and triple down on it.

@VCheng

 

[Turko]

this year total services export (not just software) to be around 230 billion USD

when you exports 230billion usd services all money remains in India whereas Turkey exports 230 billion USD just 130 billion USD staying in country entire 100billion USD flies abroad.

So we shouldnt compare our export with other countries .

 

[Nilgiri]

Inflation and depreciation are correlated but they are nowhere near 1:1.

Doing this (very rough) exercise for Turkey to add some (macro) numbers to what @UkroTurk 🚬 @Sinan @xenon5434 @Saithan and others have been saying in this thread:

Last 10 years (oct 2011 to oct 2021):

USD to Turkish Lira went from 1.74 to 9.5 (TL depreciated 5.5 times - similar if you use REER basket with euro etc)
Turkish (CPI) price level went from 200 to 573 (TL inflated 2.9 times)...with 100 being reference year 2003.

Sources:

US Dollar to Turkish Lira Exchange Rate Chart | Xe

USD to TRY currency chart. XE’s free live currency conversion chart for US Dollar to Turkish Lira allows you to pair exchange rate history for up to 10 years.

www.xe.com

Turkey Consumer Price Index (CPI)

Consumer Price Index CPI in Turkey increased to 1984.02 points in January from 1859.38 points in December of 2023. This page provides the latest reported value for - Turkey Consumer Price Index (CPI) - plus previous releases, historical high and low, short-term forecast and long-term prediction...

tradingeconomics.com

5.5 and 2.9 are very different rates over 10 years especially at this scale.

The foreigner's purchasing power/terms of trade has improved versus turkey overall about 5.5/2.9 = 1.9 times across 10 years.

This ratio will change when you focus in on specific sectors rather than entire economy....some sectors can indeed be lot higher as they are simply not "current" traded internationally much that all compared to say consumer goods.

Rather they are part of capital account and are invested into (like real estate)....so a foreigner can see even higher purchasing power returns for every euro or USD he has in Turkey....because they are not consumer good inflation rate, but much lower.

These can be further broken up into subcomponents inside say real estate (rural housing in anatolia has different demand pressure to say istanbul apartments etc etc...)

These are actually important parts of foreign trade/investment price signalling...but a govt needs robust economic experts making policy (and being listened to in basic way) to harness it early and well.

If it is incompetent, essentially the doubling of term of trade for the foreigner is "baked in"...
...and effectively Turkey has become half as competitive overall to the world that it was in 2010.

A more detailed analysis can be done (depending on time and data research), this is just the macro level of it.

This is not to be taken lightly, the next administration (and hopefully soon as possible) has a huge task ahead of it to rectify Turkey fundamental competitiveness.

 

[Nilgiri]

when you exports 230billion usd services all money remains in India whereas Turkey exports 230 billion USD just 130 billion USD staying in country entire 100billion USD flies abroad.

So we shouldnt compare our export with other countries .

Yes services is very different sector to goods.....it does not need many imported inputs for production (energy a base input might be one, but there are few others in consistent basis) hence near 100% of it is value added stuff basically.

Whereas lot of manufactures = import + value added = export (with the import side of it being large, check my earlier reply).

Some manufactures can be 10% value addition or lower (essentially you are just re-exporting an import).

But Indian goods sector (400 billion exports this year likely) can definitely be compared with Turkey to see what is similar and different there at various stages of development.....as they are both guided by the overall inelastic nature of number of their imports.

 

[VCheng]

There are slavish/worship complexes and sycophancy in every "debate" there....on top of the hate country X, Y and Z at all costs.

Who needs logical debate about actual performance when sycophancy and hatred does the job?

 

[VCheng]

This is not to be taken lightly, the next administration (and hopefully soon as possible) has a huge task ahead of it to rectify Turkey fundamental competitiveness.

It depends on what is left standing after the era of Turkey's Zia-ul-Haq is over.

 

[Nilgiri]

It depends on what is left standing after the era of Turkey's Zia-ul-Haq is over.

Turkey IMO, has enough within it to see it through and recover. Previous underlying inertias matter a lot.

Pakistan w.r,t Zia's legacy (given the still-formative juncture it got him in and the context + duration) is sadder ongoing spectre.

 

[VCheng]

Turkey IMO, has enough within it to see it through and recover. Previous underlying inertias matter a lot.

Pakistan w.r,t Zia's legacy (given the still-formative juncture it got him in and the context + duration) is sadder ongoing spectre.

It depends on how long the corrosiveness lasts. Given enough time, the end result is predictably long-lasting. Trust me, I have seen this before, up close and personal.

 

[Nilgiri]

It depends on how long the corrosiveness lasts. Given enough time, the end result is predictably long-lasting. Trust me, I have seen this before, up close and personal.

Yah it is my personal take in the end.

What %'s I gleam (underlying attitude wise) in chat with intelligentsia of both countries.

What is talked about, how its talked about and why its talked about.

How many (IMO) are supportive of the bad (lost causes I generally have no further use for than to count them)....how many are neutral/unknowing/wishy-washy....how many commit to truth, rationality and morality....

...and then how many of the last group commit so in near "austere" way like napoleon commented upon his worthy predecessor Turenne IIRC.

Out of every 10 (in my experience)....the basic number I have found for Pakistan is around 2 - 3 for the overall latter group....and maybe 1 is avowedly austere and tough. Turkey its about double all of that....maybe more.

That counts for a lot....even if my perspective is skewed, I think its skewed the same amount for all.

I reference this all from how I do so more broadly for India, China and the West too....though these are largely ongoing explorations given their vast sizes and relevances to me.

 

[TheInsider]

September 2021 verified Turkish foreign trade stats
Imports 23 billion and 328 million $ ( increased by %11.9 compared to September 2020)
Exports 20 billion and 780 million $ (increased by %30 compared to September 2020)
Trade deficit 2 billion and 547 million $ ( decreased by %47.5 compared to September 2020 which is 4 billion and 856 million $ )
September 2021 Export/Import ratio %89.1 (It was %76,7 at September 2020)

January to September foreign trade deficit decreased from 37 billion and 876 million $ (January-September 2020) $ to 32 billion and 351 million $(January-September 2021). Exports/Imports ratio increased from %75.8(January-September 2020) to %83.3(January-September 2021)

 

[Lool]

September 2021 verified Turkish foreign trade stats
Imports 23 billion and 328 million $ ( increased by %11.9 compared to September 2020)
Exports 20 billion and 780 million $ (increased by %30 compared to September 2020)
Trade deficit 2 billion and 547 million $ ( decreased by %47.5 compared to September 2020 which is 4 billion and 856 million $ )
September 2021 Export/Import ratio %89.1 (It was %76,7 at September 2020)

January to September foreign trade deficit decreased from 37 billion and 876 million $ (January-September 2020) $ to 32 billion and 351 million $(January-September 2021). Exports/Imports ratio increased from %75.8(January-September 2020) to %83.3(January-September 2021)

These stats arent good at all tbh
If we went by these numbers, then the lira must drop to around 14 to have a trade surplus
I really dont think the turkish ppl will tolerate that unless certain domestication of essential food items is present

 

[TheInsider]

These stats arent good at all tbh
If we went by these numbers, then the lira must drop to around 14 to have a trade surplus
I really dont think the turkish ppl will tolerate that unless certain domestication of essential food items is present

It doesn't work like that. Stats are coming out really well but I think there won't be a trade surplus before 2025. Things will be better when the automotive chip crisis passes in 2023 and Blacksea gas covers %20-30 of Turkish annual gas consumption starting from 2025. We will also see the returns of big investment projects in the period of 2018-2023 after 2023

 

[Lool]

It doesn't work like that. Stats are coming out really well but I think there won't be a trade surplus before 2025. Things will be better when the automotive chip crisis passes in 2023 and Blacksea gas covers %20-30 of Turkish annual gas consumption starting from 2025. We will also see the returns of big investment projects in the period of 2018-2023 after 2023

If we went by your theory then I would say that it is all useless tbh
The problem with such a theory is that the elections are 1.5 years away. Erdo doesnt have the time to wait for 3 to 4 more years to see his projects giving their planned returns
With this, Erdo will lose, and CHP will restore TCMB independence which means rate hiking, a super strong lira, and obviously massive trade deficit. Thus, by then, such a plan would be wasted and all what the turks gained is suffering for around 2 years

 

[what]

Central Bank basically confirming that they are lowering the interest rate and thus the value of lira so Turkey can become a manufacturing hub.

Turkey’s interest rate cuts can stabilise lira, central bank governor says

Economists dismiss claim that reductions will help to tame inflation

www.ft.com

He told a press conference in Ankara that Turkey needed to “seize the opportunity” presented by the pandemic to become a centre of production and expand its exports thanks to a cheaper currency. Kavcioglu argued that this would help to turn the country’s longstanding current account deficit — caused by the fact that Turkey usually imports more than it exports — into a surplus. “Turkey’s main problem is the current account deficit,” he said. “When we solve this problem and there’s a current account balance, the exchange rate will return to normal.”

So instead of developing and exporting high-value products they basically gave up and want to become a low wage manufacturing hub.

 

[Xenon54]

It doesn't work like that. Stats are coming out really well but I think there won't be a trade surplus before 2025. Things will be better when the automotive chip crisis passes in 2023 and Blacksea gas covers %20-30 of Turkish annual gas consumption starting from 2025. We will also see the returns of big investment projects in the period of 2018-2023 after 2023

Even if we had trade surplus that alone doesnt mean anything when everything else hit the rock bottom, Turkish economy is in a very bad shape and it will take a lot of hard reforms to correct years of mismanagement, Turkish people probably have to suffer at least until 2026-2030 before catching up the same growth numbers as pre 2008.

 

[HTurk]

Even if we had trade surplus that alone doesnt mean anything when everything else hit the rock bottom, Turkish economy is in a very bad shape and it will take a lot of hard reforms to correct years of mismanagement, Turkish people probably have to suffer at least until 2026-2030 before catching up the same growth numbers as pre 2008.

I don't want to play the advocatus diaboli but what you describe as 'rock bottom' could be seen as a standard of living which truly represents our actual productivity.

Turks are internationally known to live above their income level, hence, the current account deficit -> accumulation of debt. There are many Western scientists and journalists who always have argued that Turkey has to go through a restructuring process just like Greece during the Euro crisis went through.

 

[Anastasius]

Central Bank basically confirming that they are lowering the interest rate and thus the value of lira so Turkey can become a manufacturing hub.

Turkey’s interest rate cuts can stabilise lira, central bank governor says

Economists dismiss claim that reductions will help to tame inflation

www.ft.com

So instead of developing and exporting high-value products they basically gave up and want to become a low wage manufacturing hub.

I don't think the proponents of this approach quite grasp that if the lira returns to normal again after getting higher export figures, it's very likely that any foreigners that Turkey conducts export trade with will immediately go for greener pastures and thus all this will be for nothing.

As I said before, Turkey is never going to be able to compete with the likes of China and India in that department, what with their combined populations of almost 3 billion people. This is an astonishingly moronic strategy and I still have trouble believing that these idiots think that investing in education and tightening regulations is somehow worse than killing your currency. But maybe it does make sense - the former requires tackling corruption and the government to stop trying to prevent Turkish youth from having critical thinking skills. The latter doesn't.

 

[Xenon54]

I don't want to play the advocatus diaboli but what you describe as 'rock bottom' could be seen as a standard of living which truly represents our actual productivity.

Turks are internationally known to live above their income level, hence, the current account deficit -> accumulation of debt. There are many Western scientists and journalists who always have argued that Turkey has to go through a restructuring process just like Greece during the Euro crisis went through.

Im not only speaking about high private debts but things like Inflation, currency that keeps loosing value since a decade, central bank that has no independence, depleting reserves, unchecked goverment spending etc. etc.
All of these are at a very bad shape currently and need to be adressed imadiately.