More political, lesser market tension
The politics section of this Weekly devotes little space to foreign affairs, as it became almost certain that the EU would slap very light sanctions on Turkey, while other matters of foreign policy have a long fuse.
At home though, a new crackdown on pro-Kurdish rights party HDP is liable to accentuate tensions, while broad social unrest in winter months can’t be easily dismissed. The HDP arrests are yet another divide-and-conquer move by President Erdogan to disenfranchise Kurds, and to saw seeds of dissent among the rival Nation Alliance. It is not very effective, however, as several polls demonstrate that the nation is pre-occupied with economic distress and COVID-19 outbreak.
Apropos COVID-19 outbreak, there is little new to report. Health Ministry tallies are very likely to be low-ball estimates of the true magnitude of the infections, with winter months promising “worst to come”. On the other hand, the economic impact of even the moderate new restrictions are becoming palpable.
There is also not much to report on the econ side. Confidence indices continued to climb through September, but they seem to be having a hard time gaining traction, and the details portray a somewhat of a mixed picture. In case you have forgotten the preliminary release, do not be surprised by this week’s large August trade deficit, which is due Wednesday.
Finally, we hear that the New Economic Program may be announced this week. To be frank, we do not expect great revelations or a particularly realistic macro framework or a tangible reform calendar, but it should give us some numbers at least –finally-- to react to and work with.
Cosmo feels less bad about politics and the economy, and is very, very cautiously optimistic about some Turkish asset classes.
Let us take this opportunity to say a few words on our upcoming report schedule. We are planning to issue a monthly report this Friday (Insallah, or God Willing), and thus skip our weekly next Sunday. Our anecdotal report on the sectoral developments has been delayed a little, but we are hoping to put that out sometime next week as well.
Now read on...
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