Short and sweet
The marquee politics event of the week was the introduction of tax legislation to the Grand Assembly, with its core tenets intact. The marquee non-event was a tiny hike to monthly pensions of retirees in the lowest income bracket, costing the budget only a trifling sum. In his uncharacteristically short section, the politics author briefly argues that President Erdogan has taken a huge gamble on the success of the Mehmet Simsek-led Economic Stabilization Program by batting down a much broader pension hike despite immense pressure, as well as resisting lobbying by business groups to water down the tax package. He also asks whether he will be persuaded to do more, because this much isn’t enough.
The econ author also cuts it very short, touching upon the May service data, the June budget numbers and the IMF’s External Sector report’s Turkey pager. He also provides the usual updates on reserves and all. As an aside, the rating agency Moody’s had not announced its decision on Turkey at this writing, which is due today (Friday), but as we wrote last Sunday, we expect an upgrade to 5 notches below IG (and no change to the positive outlook), which would place Moody’s rating still behind the other two agencies (at 4 notches below IG).
The key event of the upcoming week is the MPC meeting on Tuesday, at which we do not expect a change in the policy rate, or a material change in the content of the statement.
Let us take this opportunity to quickly share our report schedule going forward. After today’s early release, we are putting our Weekly Tracker on its customary summer holiday earlier than usual (until September 1), as we plan to publish a somewhat more detailed monthly report next Friday (July 26). We also plan a quarterly/forecast report around mid-August. We shall, as usual, continue with our updates on important developments in the interim.
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