Eyes Turned to Growth and Inflation Data

Eyes turned to growth and inflation data. Growth and inflation data will be announced in the upcoming week.

Growth figures for the last quarter of 2020 will be announced on Monday, March 1. While all countries shrank drastically in 2020 due to the coronavirus epidemic, the contraction was inevitable in Turkey. While Turkey grew by 4.5 percent in the first quarter of 2020, it contracted by 9.9 percent in the second quarter. While a growth of 6.9 percent was recorded in the third quarter of the year, the expectation for the fourth quarter was realized as 7.0 percent growth on a quarterly basis. While the USA led the countries most affected by the coronavirus epidemic, European countries followed the USA. The Turkish economy, on the other hand, started to show signs of recovery in the second half of 2020, and the latest data proved that the uptrend continues. In this context, many domestic and foreign institutions adjusted their 2020 growth expectations for Turkey upwards. Growth data will be announced on Monday, March 1, at 10 am.   Increase in Inflation Expected The inflation rate, which has increased in recent years, exceeded 25 percent in 2018 and recorded a 15-year peak. Although single digit rates were observed for a short time after this record, the CPI continued to stay above 11 percent on an annual basis. However, as the increase in the exchange rate gained momentum in recent months, the cost burden increased with the increase in global food prices and oil. In January, the CPI recorded its peak of the last 16 years with 14.97 percent. However, it is expected that this level will not remain as the peak, that is, inflation will exceed 15 percent in February and there will be a new peak. Especially with the continuation of the sharp increase in food product prices, the state started to monitor market prices carefully in order to prevent unfair prices by establishing an inspection commission. In February, the CPI is expected to increase by 0.70 percent monthly to 15.40 percent annually. On the other hand, it is stated that an inflation that exceeds expectations may also cause volatility in TL assets and cause the CBRT to increase interest rates in the near future. Inflation data will be announced on Wednesday, March 3, at 10 am.