We will see another big fall in inflation. After falling by almost 10pp in July, YoY CPI is expected to fall by another 10pp in August, which will be released next week.
Where is the Turkish economy headed? Next week is likely to bring many macro events for the investors to digest in the coming period. With the 2Q24 growth figures released, the main discussion subject will be whether the combination of the current monetary and fiscal policies is enough to create a balance between inflation and growth rate.
More importantly, medium-term economic programme (MTP), Türkiye’s economic roadmap for the next three years, is likely to be released next week.
IMF also has some views regarding the direction of the Turkish economy. According to the newly released Article IV mission statement on Türkiye, a larger and more front-loaded fiscal consolidation is needed to help reduce inflation.
Another rating upgrade? No, not now. If you thought that after receiving the two-notch upgrade from Moody’s in July, Türkiye’s series of having rating upgrades would continue in 2024, we advise you to tune down your expectations for the next six months.
Heavy data calendar to follow next week. Manufacturing PMI (August, previous 47.2), GDP (2Q, previous 5.7% YoY), inflation (August, previous CPI 61.8% YoY), effective exchange rate (August, previous 62.9) and cash budget balance (August, previous TRY-137bn) are the data to watch next week.