A slowing Turkish economy and subsequent exchange traded fund (ETF) could continue, and President Barack Obama makes his first overseas visit to Istanbul in a show of renewed friendship.
Economists at JP Morgan expect Turkey’s GDP to drop by 9% in the first quarter, 5.1% in the second , 3.1% in the third, but increase 3.6% in the fourth quarter, according to AFP. Overall, it is estimated that the Turkish economy may contract by 3.4% this year.
Industrial output plummeted 23.7% in February compared to the same month last year. The automotive sector fell 58.7% and the manufacturing output diminished 25.9%. It is thought that some recovery will start in April when the tax cuts start showing some result. The Turkish government initiated tax cuts in housing, automotive, appliances and electronic sectors for 3 months.
The Central Bank has cut its key borrowing rate to 10.5% in March, and there is room to reduce it another 0.5% as inflation is also down.
In a speech made at an University in Instabul, Obama pledged to advance dialogue between the United States and Turkey, as stated in a transcript on The Washington Post.
Firstly, Obama wants to renew dialogues and friendship with a long time U.S. diplomatic partner. Secondly, it is a necessity to help emerging markets and developing countries by infusing the IMF with trillions of dollars and by securing food for the hungry. Lastly, he wants to include this generation of youths into global issues so that they may help solve some of the many problems.
- iShares MSCI Turkey Invest Mkt Index (TUR): down 0.2% year-to-date
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.