Let’s quickly remember the most important items of business news in Turkey from the past 10 days: Firstly, the Central Bank announced net profits of 18.3 billion Turkish Liras ($4.5 billion) for 2017. This means that the Bank will probably top the corporate tax champion list. Secondly, 2017 GDP growth came in at 7.4 percent. Finally, it was reported that the Doğuş Group is seeking to restructure its 7.8 billion-lira short-term debt.
On March 18 in Istanbul, İYİ (Good) Party senior member Durmuş Yılmaz brought together economy reporters and writers for a presentation on the current economy. İYİ Party leader Meral Akşener was also in attendance.
Inflation is rising. If the Central Bank manages to somewhat handle inflation without doing much to interest rates, there is one explanation for this: Capital inflows. To be more precise, “hot money” inflows into Turkey help to keep the exchange and long-term interest rates at “moderate” levels.
The world has in recent years been experiencing a new breed of economy, dubbed “peer to peer.” It is focused on introducing suppliers of services and products to those who are demanding those services and products.
This is the title of a note written a short while ago by Scott Minerd, a manager at an investment firm. He wrote the note to investors who still do not believe the United States Federal Reserve will raise rates, despite all the signals from the FED itself that it will.
This year’s one million dollar question is whether non-financial companies will be able to rollover their loans and secure new funds and whether the banks have additional resources to help those companies.
It has been a nightmare since last Friday for investors who have taken considerably leveraged financial risks with the help of a liquidity glut and cheap money. It started because the steam for investment peaked at a point when markets had the lowest volatility of all time. Things came crashing down when the stock market collapsed in one day.
Although the global liquidity glut has come to an end, the slackness it has caused remains. Tepid water is no use to the frog when the water has already started boiling.
The credit-rating company Fitch announced on Jan. 19 that it has decided to close its office in Turkey.
