A very enlightening TV program

I am not a big fan of of the endless Turkish panel discussion TV programs that go on ever day until the wee hours of the morning, but when I got an SMS urging me to watch TUSIAD President Umit Boyner on NTV, I wanted to give it a try, especially since I had a slight cold and wanted to play couch potato for the night.

Anyway, here's my take from the one-hour program, which was mostly the presenter reading excerpts from recent op-eds about TUSIAD and asking Boyner's comments on them:

First of all, I added SuleymanYasar, Economics columnist at daily Sabah, to the list of economists I would like to take to Pandora to feed to Toruk. He follows in the footsteps of distinguished economists Yigit Bulut and Cemil Ertem.

Mr. Yasar's argument that TUSIAD had been favoring a Stand-by with the IMF because they were after the IMF funds and had sided against the government when the arrangement fell through borders between obscurity and insanity.

But although this was not probably in his mind, there could be a case for his logic: If the IMF agreement went through, the funds would have been used to decrease the Treasury's borrowing requirement, mitigating crowding out and making more funds available to the real sector. But who in the real sector? The giants of Turkish industry did not see access to credit decline, it was the more moderate firms and SMEs that saw credit lines dry up. So the IMF Arrangement would have probably helped SMEs the most.

Incidentally, Mr Yasar also accuses TUSIAD of trying to destroy competition coming from the so-called Anatolian tigers. Never mind the fact that quite a few of those tigers are members of TUSIAD, the smaller ones who are not would have benefited the most from the IMF agreement.

However, TUSIAD President Umit Boyner did not choose this line of defense, arguing instead that the reasons for pushing for a Stand-by at the time were purely economical and that TUSIAD and SMEs were working together against global competition. Bear in mind that many economists, like your friendly neighborhood economists, were also arguing for a Stand-by at the time, and so it was not that TUSIAD was playing the lone ranger. But irrespective of your position on the Stand-by, you should agree that taking the markets and the Fund for a fool was not gentlemanly at all.

Boyner also made the point that SMEs were vital for creating employment in Turkey, but a loyal reader recently notified me of a recent paper that questions that well-presumed relationship for the US. We had found similar results working with Turkish data back in 2006, but we did not make much of those results at the time, as our main goal was completely something else. So I am now frantically trying to locate that paper, which was a background for the World Bank Investment Climate Assessment project, if I do not misremember...

First Editorial Ever: What lies beneath Turkey’s stellar tourism statistics?

Below is my first editorial ever, a small step for me but a big step for mankind- or maybe, it's the other way around... It was published in this week's South Monday.

The editorial was supposed to be only 2400 bytes max, so I couldn't get into much detail, but I'll save it for my regular weekly column, as I plan to return to the topic when the August tourist arrivals is released at the end of September.

Anyway, on the column:

Ertuğrul Günay, Minister of Culture and Tourism, likes to boast about Turkey’s impressive tourism statistics.

After all, it is hard to argue with numbers. According to data from the World Tourism Organization, while the total number of global tourists declined 4.3 percent last year, Turkey managed to secure a 3.3-percent rise. In fact, Turkey was the only G-20 country that was able to increase its incoming tourists in 2009. And with the exception of April and July, the numbers look even more impressive this year so far. What is going on?

There is quite a bit of anecdotal evidence of what economists call “substitution effects”: As Turkey’s top markets fell into the crisis, many of those who did not want to give up their precious vacations altogether opted for cheaper destinations. This effect seems to have been especially pronounced with tourists from the United Kingdom, as tourist arrivals from there increased by a whopping 12 percent in 2009.

But there is never a free lunch in Economics. As the Ministry’s Publicity Director Cumhur Güven Taşbaşı notes on page 2, tourism revenues have not been able to register as spectacular rises. While the director links the dismal revenue performance to the falling average length of stay this year, revenues per tourist have been on a downward trend after peaking in 2003. So the problem could not be shorter stays alone.

Maybe, it is time for the ministry to start questioning the Turkish tourism model of unplanned expansion of the last three decades and the squeezed margins that have come along with. Or to ponder how most of the south ended up with the all-inclusive model. Or why the sector, other than a few exceptions, cannot increase its value added.

It would be easy to lay the blame on the greedy foreign travel agencies. But the fact remains that Turkey is at number 54 out of 133 counties in the tourism competitiveness index developed by the World Economic Forum. In terms of the sub-indices, Turkey fares rather poorly in environmental sustainability, infrastructure and human resources, none of which would come as a surprise to anyone familiar with the south. In fact, were it not for its undisputed cultural and natural resources, the country would have ranked even lower.

It is often lamented that Turkey has no coherent industrial policy. The glitzy hotels and impressive statistics almost make us forget it does not have a sound tourism policy, either.

*Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at http://emredeliveli.blogspot.com.

Weekly Hurriyet Column: Foot massage in a Turkish bath

Below is the unedited version of my column for this week. You can read the final version at the Daily News website, but since I have been editing my columns myself on the Daily News website since March, you won't see much of a difference between the two. Nothing too creative about the title, I just took on the massage example.

As for the column, I would like to add that I feel the CBT is shooting itself in the foot by deliberately ignoring tax and administrative price hikes. While such a policy of not concentrating on prices it cannot control makes sense in a monetary policy framework, it is not Machiavellian at all: More emphasis on these prices could take some of the exporters' anger from the Bank.
 
In a similar sense, I don't appreciate that the Bank has chosen to stay quiet on the fiscal rule fiasco. Not only the Bank had given quite a bit of emphasis to the fiscal rule in reports and the Governor's speeches, the inflationary consequences of the price hikes, directly as well as indirectly by working their way through expectations, are sure to bring more useless exchange rate debate. 

 

Anyway, on to the column:

Since I watched the Bertolucci masterpiece The Last Emperor as a young boy, I have always wanted to visit China.

So think about my disappointment when I had to cancel my upcoming Chapan trip to get a foot massage and yet another eagle tattoo when I learned, through a Bloomberg article sent by a loyal reader, that foot massage prices had doubled in China.

Now, I don’t want to paok (sorry, I meant poke) my nose into economies I don’t know much about (and that covers most of the world, with the possible exception of Turkey), but after going through the article and some extra reading on the side, the Chinese story seemed to ring quite a few bells.

First, even though official yearly inflation is still a mere 3.3 percent in China, it reached a 21-month high in July. And there is a common belief, not just among ordinary people like the Chinese equivalent of Milliyet columnist Güngör Uras’ Ayşe Teyze, but also among economists, that real inflation is much higher than the official figures.

There does not need to be a deliberate effect on the part of the Chinese government to manipulate the numbers. Official inflation is equally likely to undershoot as overshoot real inflation because of the inherent nature of price indices. For example, if the representative consumption basket is not revised regularly, it would not take into consideration substitution effects, and there has been no major change in China’s since 2005.

Rising inflation would also have important implications on the never-ending currency manipulation debate between China and the U.S. China has long been accused of manipulating its currency, but regardless of the validity of the claims, a persisting positive inflation differential between China and its main trading partners would take some of the heat off the yuan by allowing the real exchange rate to appreciate.

Interestingly enough, a similar effect has been going on in Turkey, although it is largely ignored: While the Turkish Exporters’ Assembly, or TİM, loves to bash the Central Bank, or CBT, for the nominal exchange rate it sees as overvalued, the updated CBT real exchange rate indices tell a different story, especially compared to developing countries Turkey competes with for the EU market.

Even if the Turkish real exchange rate were overvalued (and it is to some degree, irrespective of the methodology you use), it could as well be due to inflation differentials between Turkey and its comparison countries. And a casual look at the numbers hints that the inflation differential has recently become much more important than the nominal exchange rate in driving the real exchange rate.

And once you dig a bit deeper (but not as deep as Bilica), the role of administrative and government-controlled prices becomes hard to overlook. But for some reason, TİM never even dares to question the government for the price hikes in items like electricity and water, which makes a significant part of exporters’ costs.

The government has indeed relied on knockoff fiscal measures such as tax and administrative goods price hikes quite a bit in the last couple of years. Given that the fiscal rule seems to be shelved to make room for pork-and-barrel spending before the elections, it is likely that the new government will lean on similar price hikes, as such knockoff measures are the most common temporary patches to the budget in Turkey. Too bad exporters’ costs would increase further. But you don’t see TİM criticize the government on the fiscal theatrics, either.

Instead, they are busy picking fights with thinks tanks trying to assist them get a footing in the Brave New World or a Central Bank helping keep their costs down by bringing inflation under control.

*Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at http://emredeliveli.blogspot.com.

Roubini Post: Demystifying Turkish Unemployment

This post already appeared in the Hurriyet Daily News this week; Europe Economonitor is just republishing it, with a slightly different title, but I just wanted to cross-link for the readers who might have missed it the first time around...

There is also a blog version, where I go into a couple of sectoral details on unemployment as well as explain (well, sort of) how I calculated the Turkish NAIRU, so feel free to have a look there as well.

Addendum to Hurriyet column

I just noticed that I forgot to fulfill my promise to Daily news reader Kebab (yep, that was his display name) for a graph of headline and seasonally-adjusted unemployment. Here it's:

By the way, BETAM has a good piece on unemployment. I agree with almost everything they say in the note, but still can't figure out they are more optimistic than me on employment. Go figure...

Roubini Post: Loyalty and Conscience in Turkey

This post already appeared in the Hurriyet Daily News this week; Europe Economonitor is just republishing it, with a slightly different title, but I just wanted to cross-link for the readers who might have missed it the first time around...

There is also a blog version, but it doesn't offer anything new...

Weekly Hurriyet Column: Demystifying Turkish unemployment

Below is the unedited version of my column for this week. You can read the final version at the Daily News website, but since I have been editing my columns myself on the Daily News website since March, you won't see much of a difference between the two. Sorry for the boring title this time around.

As for the column, a few additional points are in order: First, sectoral details of the trend in employment reveal interesting facts. While the increase in employment in industry looks impressive, most of it is due to weak base effects- that is the sectoral equivalent  of one of the major points in the column. The same is also true for construction, but services is the one that really puzzled me, as it has managed to suck in workers even through the crisis. When I dug deeper (but not as deep as Bilica), I was even more surprised: Most of the increases come from a single item, administrative and support services. Unless the demand for secretaries skyrocketed last year, I have no idea on how to explain this fact.  So if you have a valid explanation, please go ahead and enlighten me.

As for my point on the NAIRU, I used a simple multivariate model, similar to the one used in an 2004 IMF working paper, although I had not seen the paper when I did it hastily Saturday night after heading straight home from a Besiktas loss @ Inonu. Since I was too lazy to write out my methodology in full, I searched for a paper that had done a similar thing, and this was the first one I came across.

Anyway, on to the column:

Last Monday’s unemployment data caused a difference of opinion among analysts, with your friendly neighborhood economist taking the data with caution and almost everyone else rejoicing over the figures. Some even claimed that PM Erdoğan, who had ruled that unemployment would fall to 10 percent several months ago, would be proven right as early as next month.

To recap, unemployment and non-farm unemployment came in at 11 and 13.8 percent respectively in May. While these numbers look impressive on a year-on-year basis, most of the improvement is due to the weak base from last year. In fact, seasonal numbers look less impressive, as seasonally adjusted unemployment remained unchanged from the previous month and seasonally adjusted non-farm unemployment even registered a small decrease.

Overall, the figures show that the improvement in labor market conditions is coming to a halt. They are also consistent with the slowdown in leading indicators in May: Purchasing Managers Index, capacity utilization and real and consumer confidence had all stalled in the same month, hinting that Europe's woes had somewhat spilled over into Turkey.

As for the future, I am confident that if the PM is proven right, it will not be in the June data. In fact, unemployment has usually increased from May to June in the past. Last year was a big exception, but even then headline and non-farm unemployment both fell 0.6 percent only.

On the contrary, the monthly KONDA surveys I have been working on regularly show unemployment picking up over the summer. KONDA numbers are naturally different from the official figures, but they have so far done an excellent job in predicting the direction of unemployment. And while consistent with seasonal trends, the stronger-than-expected increases over the summer, if realized, would mean that firms might have gone on a hiring spree in the second quarter due to optimistic domestic and global economic conditions.

Looking further ahead, in line with the recent improvement in leading indicators and the improvement in Europe, it is possible for seasonally adjusted unemployment to continue its downward creep. However, taking into consideration seasonal patterns, it is quite unlikely that the headline figure will touch the PM’s 10 percent target this year. But more important than a single number are the implications of this data on growth and monetary policy.

Forecasting has been tough of late due to the recent mixed data. For example, while leading indicators still look healthy, industrial production, usually a good predictor of growth, did decline 2.1 percent month-on-month in June. But existing data do not rule out an almost-double-digit yearly growth in the second quarter. Beyond that is anyone’s guess for now.

As for monetary policy implications, unemployment data are supportive of the Central Bank's hold-for-longer strategy, and other statistics are far from indicating the economy is overheating as well. Therefore, it is unlikely that the bank will start raising rates before well into next year, even without taking into consideration the politics of starting a hiking cycle before the elections.

One complication that has escaped many analysts is that Turkish non-accelerating inflation rate of unemployment, or NAIRU, might have moved as a result of the crisis. My back-of-the-envelope calculations hint to a seasonally adjusted NAIRU of around 11 percent. As seasonally adjusted unemployment is already at 12 percent, the bank may not have as much leeway as previously imagined.

Even if you see the 10 percent debate as a pissing contest, unemployment still needs to be tracked carefully despite being a lagging indicator released more than two months late.

*Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at http://emredeliveli.blogspot.com.

Roubini Post: Turkish Labor Market Confirms Slowdown in the Second Derivative

This post already appeared in the blog yesterday; Europe Economonitor is just republishing it, but I just wanted to cross-link it for the readers who might have missed it the first time around...

Vanity, definitely my favorite sin

Or at least according to Al Pacino's character in The Devil's Advocate. But I guess I am not all that different, given what I am wasting my time with:

In case, this didn't notice, the aim is to shamelessly show off for making it to the daily bestseller list at Hurriyet Daily News with my latest column. As you can see, I did the same thing back at the beginning of the month with my Carsi column:

And speaking of Al Pacino, I really did run into him while jogging in Martha's Vineyard back in 2004, although my friends there were not convinced at the time. I only wish Umit and Omer were a bit in shape and could keep up with me:)... And no, I did not run into Jaws!!!

Weekly Hurriyet Column: Loyalty and conscience in the referendum

Below is the unedited version of my column for this week. You can read the final version at the Daily News website, but since I have been editing my columns myself on the Daily News website since March, you won't see much of a difference between the two. As for the title, the original title in my mind was simply "Loyalty and Conscience"- I have always dreamed of a Jane Austen title:) But a search engine optimizer I once met told me that in order to be get more clicks from search engines, I needed to use titles that are right to the topic; for example, if I am writing about the fiscal rule, "Dead before it was born" would not be a good idea, "Fiscal Rule: Dead before it was born" would be better, and " Turkish Fiscal Rule: Dead before it was born" would have been the best. At the end, I submitted the title as above to appease my literary and Machiavellian sides at the same time. But as twist of fate, this title turned out to be too long for the hard copy, with the copy editors publishing it simply as "Loyalty and Conscience". So I got my Jane Austen title after all:)...

By the way, there are a few other interesting questions in the survey other than referendum and control questions. My favorite are the ones on personal hygiene such as how often the subjects bath or wthether they use toilet paper. I am planning to use factor analysis to come up with a simple Recep Ivedik index. Then, I could look at the education, income and of course, voting preferences of the Recep Ivediks. That would make a light summer Hurriyet column, but I am scared of being called a white Turk for that, so it may just make it to the blog. We'll see... 

Anyway, on to the column:

Polling firm KONDA’s decision to devote the latest edition of their monthly Barometer survey to the upcoming referendum allowed me to continue with my study from last month.

Confirming last month’s results, there is a very strong relationship between voting in the referendum and political party affiliation. In fact, the results continue to hold once you control for subject characteristics, including views on the constitutional amendment package, or package for short.

Kurdish voters continue to defy their party: Despite the Peace and Democracy Party, or BDP’s, cold feet towards the constitutional amendments, or at least the party pushing for the package, they are more likely to vote “yes” in the referendum than any other self-described ethnic group. Again, the results are much more than simple cross-tabulations, as they don’t disappear after controlling for party affiliation and view of the package.

One of the biggest surprises of the survey is devoutness. While subjects who describe themselves as pious or who support the controversial headscarf are more likely to vote “yes,” the relationship weakens considerably once you control for party affiliation and opinion about the package. The mirror image of this result holds true for the naye-sayers as well, hinting that not piety per se, but party affiliation and political polarization are the deciding factors in the referendum.

These results might be enough to convince you that neither the ayers nor the nayers are likely to change their vote. It almost convinced me, at least until I noticed a considerable amount of “flexibility” in both groups: Although my agreement with KONDA prevents me from divulging actual numbers, a considerable share of the two camps are saying their vote can change or that they are still undecided.

As a result, although the difference between yes and no votes is a statistically significant gap difficult to close in a month (note that I am not revealing who is ahead), the continuing lead of the undecided in the polls, along with the presence of the closet undecided, means that the referendum is far from being in the bag for the group ahead in the polls. It therefore makes sense to study the flexibles in more detail. Besides, the large number of the closet undecided could be a direct result of political polarization and the reluctant voting that comes with it, so there is an intellectual case for such an inquiry as well.

After a simple statistical analysis, the following results emerge: The flexibles are more likely to be women than men. There are also important regional differences. For example, a flexible is much more likely to come from Thrace than anywhere else, but the factor driving that result turns out to be political polarization, with Thrace shining as the least polarized part of the country.

Another interesting result in the non-linear relationship with education: While the least and most educated subjects seem to have made up their minds for good, there is quite a bit of flexibility in the ones in between. Finally, the flexibles look more to TV debates and the dailies to form their opinion than to their parties, party leaders or family elders, highlighting the importance of impartial and honest reporting in the media.

Unfortunately, we don’t know the factors that would make the flexibles switch their votes on Sept. 12. But I have learned something much more valuable: There is a sizable population in Turkey, in both camps, struggling with the dilemma between their beliefs and sense of duty as a voter.

Unless this fight between loyalty and conscience can be resolved in favor of the latter, Turkey cannot be a true democracy even if you change the Constitution twice over.

*Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at http://emredeliveli.blogspot.com.

Labor Market confirms slowdown in the second derivative

Normally, I do not do data analysis, it makes me feel like a labrat, and I don't see the point since I am not a market economist anymore, but I was asked to interpret the unemployment numbers and always being your friendly neighborhood economist, I complied. And since I emailed the text below, I thought- why not post it as well?

One small addition is on seasonality; although you can use econometrics to weed out seasonality, there is a simple graphical approach as well:

The graph above, where I show changes in unemployment and non-farm unemployment from April to June for the previous few years, hints that the mom fall in April is more or less in line with seasonal averages for unemployment, but is far too large to be explained by seasonality alone for non-farm unemployment. Anyway, here's is my quick  unemployment take; I wrote the whole thing in 15 minutes or so, so feel free to point out to any errors, grammatical or conceptual alike...

Anyway, on to my take on the latest employment figures:

Unemployment and non-farm unemployment came in at 11 and 13.8 percent respectively in May. While these numbers look impressive on a year-on-year, or yoy, basis, most the 2.6 and 3.2 percent respective improvements is due to the weak base from last year. In fact, seasonal numbers look less impressive, as seasonally-adjusted unemployment remained unchanged from the previous month and seasonally-adjusted non-farm unemployment even registered a small decrease.

Overall, the figures show that the improvement in labor market conditions is coming to a halt. They are also consistent with the slowdown in leading indicators in May: PMI, capacity utilization, real & consumer confidence had all paused in the same month, reflecting that Europe's woes had somewhat spilled over to Turkey.

As for the future, in line with the recent improvement in the same leading indicators and the improvement in Europe, it is possible for the unemployment rate to pick up with its slow downward trend. But at the current rate and taking into consideration the seasonal trends in unemployment, it is quite unlikely that unemployment will touch the 10 percent target set by PM Erdogan some time ago.

Due to the lagging nature of labor market indicators and the mixed signals coming from other data, it is difficult to infer much on the implications of today's data the Turkish economic recovery. Forecasting has been tough of late due to the recent mixed data. For example, while leading indicators still look healthy, industrial production, usually a good predictor of growth, did decline 2.1 percent month-on-month in June.

As for monetary policy implications, today's data are supportive of the Central Bank's hold-for-longer strategy, and other statistics are far from indicating an overheating of the economy as well. Therefore, it is unlikely that the Bank will start raising rates before well into next year, even without taking into consideration the political economy considerations of starting a hiking cycle before the elections.

One complication that has escaped many analysts is that Turkish NAIRU might have moved as a result of the crisis. This would mean that the Bank does not have as much leeway as previously imagined, so it would be important to look for such signs in future releases. Therefore, despite being a lagging indicator and being released two and a half months late, unemployment still needs to be tracked carefully.

Interesting Picks

Roubini on Gecco, or sort of:)

Since we are talking about movies, here's escape from arbitrage, with a Turk on the director's seat:)

One of the most quoted pieces of the last couple of days is Tyler Cowen on free parking in NYC. Now, I have something to quote when I get raised eyebrows for lamenting on the free parking at Istinye Park, although the theory behind that is a bit different.

Calculated Risk's weekly summary.

CalculatedRisk explains why she expects unemployment in the US to increase.

You thought banks had the biggest exposure to PIGS? Think again...

The trouble with economic forecasts (or economists who make them)...

I like this article for summarizing my view on US Treasuries rather well: TIPs are the best, ---- the rest:)

Goldman revolutionizes gym fees.

The US money multiplier is missing because it wasn't there in the first place.

Chart of the day: Population by geographic coordinates.

EconNews Roundup

Since I am finally done with archiving, it's time to revive my domestic and international news summary columns:

A financial instrument that warrants cheer.

Zaman is worried 80,000 aye-sayers in the referendum will not be able vote because of the umrah. I touch on the relationship between voting preferences in the referendum and piousness, among other things, in tomorrow's Daily News column. 

Tourists to Cappodocia on the rise. For the rest of Turkey, a picture is worth more than a thousand words:

Speaking of tourism, culture and tourism minister declares Turkey one of the world's leading tourism destinations on number of tourists. Since I feel artistic today, let me provide another pciture:

Both lines are 12-month moving average, as there is quite a bit seasonality in the data and smoothing things out just makes them look nicer:) This downwards trend in in the already-low revenues per tourist was one of the main points of my recent Kommersant interview and will also feature in my annual tourism column, due to appear in a few weeks- I am planning to write right after the August tourist arrival/departure statistics are announced, but since his excellency's ministry is not able to publish these on time (despite the fact that they already sit on the computer), I am not able to give you an exact date.

Istanbul Chamber of Commerce confidence index falls mom.

Kocaeli generates 15% of Turkey's foreign trade.

Hurriyet takes on Istanbul business clusters. Interesting piece, but I wish they had looked at the large economic literature on economic clusters.

Last but not the least, all of these already appeared on the web site, but here is what your friendly neighborhood economist wrote about in the last three weeks.

Pension assets on the rise.

Roubini Post: The War of the Think Tanks

This post already appeared in the Hurriyet Daily News this week; Europe Economonitor is just republishing it, but I just wanted to cross-link for the readers who might have missed it the first time around...

There is also a blog version, which elaborates a bit on the misunderstanding of the TEPAV note, which was later more clearly explained in a column by TEPAV director Guven Sak  (in Turkish).

Speaking of TEPAV, there is an important disclaimer I should have made before, but totally forgot: I was Director of Economic Studies at TEPAV from June 2005 to October 2006. And I know Umit Ozlale, one of the authors of the TEPAV report, even before my Ankara days; in fact, we attempted to write a paper on ethnicity and growth once.

 

You might say that's not a minor detail to forget, but it did not even occur to me that it should be an issue until this morning. And as anyone who knows a bit of my Ankara days, or at least the end of my Ankara days, would confirm, I am more or less the last person who would unfairly favor TEPAV. That's all I have to say about that, as Forrest Gump would say, but in any case, I try to be 100% objective in my econ. analysis. Speaking of that, you might also have noticed my commendation, in the column, of the government's efforts to diversify Turkey's exports to MENA. So maybe those who accuse me of unfairly criticizing the government and scaring foreign investors away will stop and think for a minute before throwing baseless accusations around.

Two really good metaphors on the fiscal rule mess-up

I was meaning to relay these two metaphors, both of which are more than a couple of weeks old, before; it just got delayed during my long absence.

First, Tanju Gorgulu, whose book I had reviewed some time ago (although it was under a nom de guerre), likens the fiscal rule formula to the end-year bonus formulas he used to design during his previous life as a finance executive- these were supposed to be designed not to look too dangerous or complicated. As Gorgulu notes, the formulas never substituted for old-school bargaining.

Then, Hasan Ersel likens the attempts to postpone the fiscal rule to a someone canceling catastrophe insurance as the storm appears on the horizon, obviously alluding to the fiscal woes around the globe- I could not find the article, but it should be from mid to late-July.

Both authors wrote well in advance of the government's latest fiscal rule theatrics, so they should be commended for their premonition, but your friendly neighborhood economist did not fare that badly, either.

Roubini Post: The Carsi Approach to Turkish Monetary Policy

This post already appeared in the Hurriyet Daily News on August 2; Europe Economonitor is just republishing it, but I just wanted to cross-link for the readers who might have missed it the first time around...

There is also a blog version, but it doesn't add much new, other than summarize my views on the latest fiscal developments and admit defeat on my supposedly ingenuous method for forecasting food inflation.

Game Over

Hakan Tarakci wins the contest.

Joking aside, I am really wondering if anyone else has noticed, and whether the "author" or Finansonline will issue an apology. Will keep you posted...

Roubini Post: The Turkish Referendum Countdown

Now that I have got those two things out of my system, I can continue with my archiving, including submitting my old Hurriyet columns to Roubini Global Economics for publication on their web site as well.

This post already appeared in the Hurriyet Daily News on July 26; Europe Economonitor is just republishing it, but I just wanted to cross-link for the readers who might have missed it the first time around...

There is also a blog version, where I briefly explain how I came up with my electoral projections.

A couple of addenda to the previous post

First, I have been told that you need to register to Finansonline to view the Erdal Saglam article. I was going to copy and paste the text, but that would have been kind of satirical, and besides, Finansonline web site does not allow copy and paste. But what I can do is show you a picture of part of the article:

This way, I am hoping to keep those of you too lazy to go through the 5-minute  Finansonline registration a chance in the competition and also wet your appetites- the rest of the article is just as bad:)

And in case you are wondering, I did ask for permission from Fortis to use their article in my blog:):), although I did not mention why I asked, as I did not want to drag anyone into my silly games...

The P.... word

I invite you to play a little game, if you speak Turkish: Please have a look at today's Finansonline article by Erdal Saglam, which I post directly below for your convenience as well:

https://www.finansonline.com/articles/esaglam/100811.asp

Now, please have a look at the excerpt from the monthly Fortis note, Glokal Ekonomist below, which was published last week. Then, like the old detergent ad, tell me what the difference is- the answer is the same as in the ad:)

By the way, if you are busy and have no time for my silly games, you could as well open two browser windows side by side and skim both texts... But you have to find the right parts to compare, I didn't want to make the game way too easy, although it is quite easy...

The first person who emails me what the p... word in the title is or writes in the comments section of the blog will win a CD of all the chants the eziks have stolen from Besiktas...

Anyway, here we go:

AB kaynaklı yavaşlamanın, bizim beklentimiz doğrultusunda, Dünya’da ve Türkiye’de ikinci bir dip oluşmasına yol açmayacağı, son dönemde gelen verilerle desteklendi. Bu durum ilk bakışta rahatlatıcı gibi dursa da, yine yeni gelen verilerden, toparlanmanın çok yavaş ilerleyeceği ve kriz öncesi üretim seviyelerine ulaşmanın oldukça uzun zaman alacağı kesinlik kazanmaya başladı. Yani en olumsuz ve en olumlu taraftaki beklentilerin destek kaybetmesi ile “ortanın biraz olumsuzu” diyebileceğimiz oldukça yavaş toparlanmayı içeren bir senaryo geçerlik kazanmış gözüküyor. Öncü göstergeler doğru ise, zayıf verilerle bir süre daha yaşamaya alışmamız gerekecek.


Yurtdışına baktığımızda, Global PMI üretim endeksinin Temmuz ayında, Şubat ayından beri en düşük seviyesi olan 54.6’ya gerilediği görülmektedir. Bu da üretimin bu senenin ikinci çeyreğinde zirve yaptıktan sonra yavaşlama eğilimine gireceğini düşündürmektedir. Ancak endeksin kritik 50 seviyesinin üzerinde bulunması, büyümenin halen devam ettiğini düşündürmekte ve ekonomilerin ikinci bir dip yapacağı yönündeki kötümser beklentileri yalanlamaktadır. Ancak durum bu kadar kötü olmasa da, kriz öncesi üretim seviyelerine ulaşmanın özellikle gelişmiş ülkeler için oldukça uzun zaman alacağı da gittikçe daha belirgin hale gelmektedir. Örneğin, ABD’de son açıklanan tarım dışı istihdam Temmuz ayında 131 bin kişi azalırken, bu rakam, beklenen 65 bin kişilik düşüşten çok daha olumsuzdu. Özel sektör istihdamındaki artış da 71 bin ile beklenen 90 bin yükselişin altında kaldı. İstihdam piyasasındaki bu zayıflık, ekonomilerin toparlanma hızını belirgin olarak düşürecek gibi durmaktadır. Bu görünüm altında çoğu merkez bankasının da parasal sıkılaştırmaya, bırakın bu seneyi, gelecek sene bile ancak yılın sonlarına doğru başlayabileceği tahmin edilmektedir. Piyasada geçen vadeli işlemlere göre FED ve ECB’nin bu sene faizleri sabit tuttuktan sonra 2011’in son çeyreğine doğru 50 baz puan civarında bir faiz artırımına gitmesi beklenmektedir.


Türkiye’deki ekonomik aktivite, gelişmiş ülkelerden daha iyi de olsa, ana eğilimler açısından paralel bir seyir gözlenmektedir. Yılın ilk 5 ayında gözlenen ve özellikle son aylarda hızlanan mevsimsel düzeltilmiş sanayi üretim endeksindeki artış eğiliminden sonra, Haziran ayında % 2.1’lik bir düşüş yaşanmıştır. PMI’daki ve Tüketici Güven Endeksi’ndeki düşüşün sınırlı bir kısmı Temmuz ayında geri alınırken, bu durum da AB kaynaklı yavaşlamanın sonuna gelmiş olabileceğimizi düşündürmektedir. Yani sanayi üretiminde Haziran ayındaki sert düşüşün sonraki ayları da etkileyecek bir eğilime dönüşmesini beklemesek de, toparlanmanın hızı konusunda çok iyimser olamıyoruz. Bu verilerin yanında, bu görüşümüzün oluşmasında kredi eğilimlerine yönelik yeni yayınlanan beklentiler de etkili olmaktadır.


Bilindiği gibi, Türkiye’de ekonomik aktivitenin Dünya geneline göre biraz daha iyi bir performans göstermesinde, düşen kredi faiz oranları ile sağlanan iç talep artışı etkili olmuştur. Özellikle kredi büyüme hızının, oldukça çarpıcı boyutlara ulaştığını söylemek mümkündür. Sabit kurlarla hesapladığımız ve tüketici finansman şirketlerinin de dahil olduğu toplam kredi hacmi göstergemizdeki haftalık değişimler, kredi artış ivmesinin kriz öncesi boyutlara ulaştığını teyit etmektedir. Kriz öncesinde, 2006-2007 yıllarında % 0.6 olan haftalık kredi artış hızı, 2008-2009’da % 0.3’e gerilemiştir. 2010’un ilk 7 ayında ise bu oran % 0.6’ya, hatta son haftalarda % 0.9 civarına yükselmiştir. Bu göstergedeki yıllık artış oranı ise % 33 ile kriz öncesi seviyelere şimdiden ulaşmıştır. Bu görünüme gevşek para politikasının, yani düşen faiz oranlarının büyük etkisi olmuştur. 2006 yılındaki kredi patlaması döneminde bile konut faiz oranları en düşük % 13.9’u görmüştü. Son dönemde ise, Merkez Bankası’nın faizleri bir süre daha düşük tutacağı yönündeki ifadeleri ve faiz artırımlarına normal şartlarda 2011 yılı ortalarında başlayacağı beklentileri ile yeni kullandırılan konut kredilerinde ortalama faiz oranları yıllık bileşik olarak % 11.0’e (aylık % 0.87) kadar gerilemiştir. Ortalama faiz oranları taşıt kredilerinde % 11.4 (aylık % 0.90), ihtiyaç kredilerinde % 13.9 (aylık % 1.09), ticari kredilerde de % 9.0 (% 0.72) ile yine tarihi düşük seviyelerdedir.


Ancak Merkez Bankası kredilerdeki bu artışın enflasyonist baskı yaratmasından endişelidir. Yine de, son Enflasyon Raporu’nda da belirttiği gibi, dış talep zayıf seyrettiği sürece Banka bu duruma faiz artırarak tepki vermekte acele etmeyecektir. Bunun yerine, halihazırda döviz munzam karşılıklarını artırarak ve haftalık repo ihalelerine başlayarak uygulamakta olduğu çıkış stratejisine devam edecektir. Burada da, krediler açısından en can alıcı ve büyüme hızını kesebilecek tedbirler henüz hayata geçmemiştir. Banka yıl sonuna kadar, şu anda 19 mlr TL civarında seyreden repo fonlamasını azaltarak TL likiditesinin eskisi kadar bol olmamasını sağlayacak, TL ve döviz munzam karşılıkları artıracak ve teknik faiz indirimine giderek ON faizlerle haftalık faizleri eşleyecektir. Bunların kademeli olarak uygulamaya geçmesini bekliyoruz. Özellikle TL’ye yönelik uygulamalar, faiz artırımlarına yönelik beklentiler değişmese de, kredi faizlerinin bir miktarı yukarı gitmesine yol açabilir. Bu da kredi büyümesi üzerinde olumsuz etki gösterebilir.


Krediler konusunda bir başka önemli gösterge de, Banka Kredileri Eğilim Anketi’dir. Burada, banka yöneticilerine, mevcut durumdaki görünüm ve önümüzdeki dönemde krediler konusunda nasıl bir tavır alacakları sorulmaktadır. İlk çeyreğe ilişkin önceki ankette bankacılar, hem tüketici hem de ticari kredilerde, sonraki dönemde kredi standartlarının belirgin olarak gevşetileceğini söylerken, ikinci çeyreğe ilişkin son ankette daha temkinli bir tavır dikkati çekmektedir. İşletmelere verilen kredi standartlarının son 3 ayda sıkılaştığı, önümüzdeki dönemde ise değişmeyeceği söylenmektedir. Tüketici kredilerinde ise konut ve taşıt kredi standartlarının son 3 ayda hafif gevşetildiği, önümüzdeki dönemde de benzer eğilimin devam edeceği söylenmektedir. Yani Merkez Bankası’nın çıkış stratejisinin yanında, global belirsizlikler de önümüzdeki dönemde kredi büyümesini yavaşlatacak gibi durmaktadır.


Sonuç olarak, geçmiş döneme yönelik verilerin gösterdiği eğilim ve tüketici, reel sektör, bankacılık sektörlerinden gelen beklenti anketleri bir süre daha zayıf ekonomik verilerle yaşamaya alışmamız gerektiğini söylemektedir. Bu durum doğal olarak enflasyon konusunda rahat olmamızı ve faiz artırım beklentilerinin en erken 2011 yılının ikinci yarısına atılmasını getirmektedir. Biz de bu doğrultuda, faiz artırımlarının 2011 yılının mayıs ayında başlaması ve 25 baz puanlık yavaş adımlarla ilerleyerek yılın tamamında 200 baz puan olması yönündeki tahminimizi koruyoruz.


Bir Ay Böyle Geçti...


* Global PMI endeksi Şubat ayından beri en düşük... Temmuz ayında Global PMI üretim endeksi gerilemeye devam ederek, önceki ayki 57.4’ten, 54.6’ya geldi. Endeksin bulunduğu seviye, halen ekonomik toparlanmanın devam ettiğine işaret etse de Şubat ayından beri en düşük değerine gerilemesi, bir miktar ivme kaybı olduğunu düşündürüyor. Hizmet sektörü endeksi Temmuz ayında 0.6 puanlık düşüşle 54.3 olurken, imalat sanayi üretim endeksi 1.4 puan gerileyerek 55.5 oldu. İmalat sanayi PMI endeksinin gelişmiş ülke ayrımına baktığımızda da, ticaret ilişkileri açısından Türkiye için daha önemli olan Euro Bölgesi endeksinin 1.1 puanlık artışla 56.7’ye yükselmesi olumlu bir gelişmedir. Diğer taraftan ABD endeksi 0.7 puan gerileyerek 55.5, Japonya endeksi ise 1.1 puan düşerek 52.8 değerini almıştır.
* Tüketici ve üretici güveni... CNBC-e’nin yayınladığı Tüketici Güven Endeksi Temmuz ayında aylık bazda % 6.5 yükseldi. Gelecek döneme ilişkin beklentilerdeki iyileşmenin tüketici güvenindeki toparlanmanın asıl sebebi olduğu görülüyor. Diğer yandan, mevcut dönemin dayanıklı tüketim malı almak için uygunluğuna yönelik değerlendirmelerin önceki döneme göre bir miktar daha karamsar olduğu izlendi. Mevcut döneme ilişkin Tüketim Eğilim Endeksi aylık bazda % 1.5 geriledi, buna karşın Beklenti Endeksi ise % 11 oranında arttı. Bu arada, Türkiye PMI Endeksi ise Temmuz ayında da devam ettirdiği düşüş eğilimiyle 52.8’e geriledi, ancak aylık bazdaki düşüş hızı 0.4 puana indi. PMI’ın mevcut seviyesi daralma ve genişleme dönemlerini ayıran kritik 50 seviyesinin üzerindedir ve bu da ekonomide büyümenin devam ettiğine işaret etmektedir. Ayrıca, endeksin düşüş eğiliminin hız kestiği de izlenmektedir, ki bu da Euro Bölgesi’ndeki problemlere bağlı olarak yurtiçi ekonomik faaliyetlerde yaşanan yavaşlamada en kötünün önümüzdeki dönemde geride kalacağını düşündürmektedir. Yine de, ekonomide belirgin bir ivmelenme öngörmüyoruz ve toparlanmanın yavaş seyretmesini bekliyoruz.
* Dış ticaret açığındaki artış yavaşlıyor... Haziran ayında dış ticaret açığı 5.6 mlr dolar ile piyasanın 5.9 mlr dolar olan beklentisinden ve bizim 6.2 mlr dolar seviyesindeki tahminimizden daha iyi geldi. İhracatın 9.6 mlr dolar ile öngörülenin üzerine çıkması ve ithalatın 15.2 mlr dolar ile tahmin edilenin altında kalması, bu sonuçta rol oynadı. Yine de, dış ticaret açığı geçen yılın aynı dönemine göre 1.5 mr dolar arttı, ancak bu değişim geçtiğimiz 5 aydaki ortalama 2.4 mlr dolar olan yükselişten daha sınırlıydı. Bu gelişmenin iki sebebi bulunuyor: İlk olarak, artık daha güçlü baz dönemleri ile yıllık karşılaştırmalar yapılmakta ve bu da yıllık değerlendirmelerde daha düşük artışlara yol açmaktadır. İkinci olarak da Euro Bölgesi’ndeki sorunların yurtiçi ekonomik aktivite üzerindeki etkisini göstermeye başlaması ile ithalat yavaşlamaktadır. 12 aylık birikimli dış ticaret açığı ise 51.2 mlr dolardan 52.6 mlr dolara yükselirken, Ekim 2009’da dönemsel en düşük seviye olan 36.5 mlr doların da belirgin olarak üzerine yükselmiştir. 2010’un tamamında ihracatın 103.3 mlr dolara, ithalatın 167.6 mlr dolara ulaşmasını ve dış ticaret açığının da 64.3 mlr dolara çıkmasını bekliyoruz (piyasa beklentisi: 59.1 mlr dolar).
* Cari açık artmaya devam ediyor... Cari denge Mayıs ayında 3.0 mlr dolar açık vererek, piyasa beklentisine paralel, ancak bizim 3.2 mlr dolar açık seviyesindeki tahminimizin hafif altında gerçekleşti. Bu arada, 12 aylık cari açık 24.8 mlr dolardan 26.2 mlr dolara yükseldi. Geçen yılın aynı ayında, ekonomik görünümün oldukça zayıf koşullarda olması ve bu doğrultuda kriz ortamında açığın sınırlı kalmış olması, cari açığın yıllık bazda yükselmesinin en önemli sebebi oldu. İlk beş ayda 17.4 mlr dolara ulaşan cari açığın artmaya devam ederek yıl sonunda 37.1 mlr dolara (GSYH’nin % 5.2’si) ulaşmasını bekliyoruz. Bu da piyasanın son dönemde artış eğiliminde olan ve son ankete göre 33.1 mlr dolar seviyesinde bulunan beklentisinin üzerindedir.
* Dış borçlanmada teknik düşüş, döviz rezervlerinde artış... Finansman tarafına bakıldığında, genel görünüm hala sıkıntılı olsa da, bazı alanlarda iyileşmeler göze çarpmaktadır 12 aylık birikimli olarak bakıldığında, Nisan itibariyle, firmalar uzun vadeli kredilerinde 10.9 mlr dolar net borç ödeyicisi pozisyonundaydılar. Ancak bu, bir ölçüde, Türk Parasının Kıymetini Koruma Kanunu’ndaki yeni düzenleme ile şirketlerin yurtiçi bankalardan döviz borçlanmasının kolaylaştırılmış olmasından kaynaklanıyordu. (Ödemeler dengesi istatistiklerinde yabancı borç olarak nitelendirilen ve yerel bankaların yurt dışı iştiraklerinden elde edilen borçlar, lokal bankalara transfer edilmiştir. Böylece dış borçlanmada düşüş yaşanmıştır. ) Mayıs ayında ise firmaların uzun vadeli net kredi kullanımı 0.1 mlr dolarlık bir girişe işaret etmiştir ki, bu da ya yukarıda bahsedilen etkinin sona ermesinden ya da şirketlerin dış borçlanma imkanlarında bir iyileşme olmasından kaynaklanmaktadır. Bankaların kısa vadeli borçlanmaları kanalıyla da 1.3 mlr dolarlık yabancı sermaye girişi olduğu izlenmektedir. Bankalardaki mevduatın artması ise 0.8 mlr dolar kaynak sağlamıştır. Mayıs ayında doğrudan sermaye girişi olmazken, porföy yatırımları kanalıyla da 0.3 mlr dolar gibi oldukça sınırlı bir net giriş olmuştur. Bu arada, Mayıs ayında net hata ve noksan kalemi, kaynağı bilinmeyen sermaye girişlerinin 1.6 mlr dolar gibi yüksek bir düzeyde olduğuna işaret ederken, burada 12 aylık birikimli olarak 0.7 mlr dolarlık çok sınırlı bir giriş olmuştur. Büyük ölçüde, banka mevduatlarındaki artış ve kısa vadeli kredi kullanımına bağlı olarak Merkez Bankası’nın döviz rezervi ise Mayıs ayında 1.8 mlr dolar artmıştır.
* Sanayide toparlanma zayıf devam ediyor... Sanayi üretim endeksinin Haziran ayında yıllık bazda kaydettiği % 10.2 artış, piyasanın % 10.1 seviyesindeki beklentisiyle ve bizim % 10.0 olan tahminimizle uyumluydu. Mevsimsel düzeltilmiş verilere bakıldığında, Haziran ayında aylık bazda % 2.1 gibi sert bir düşüş vardı ve bu da Mayıs ayında kaydedilen % 1.7’lik belirgin yükselişin (daha önceden % 1.9 olarak açıklanmıştı) fazlasıyla geri verildiği anlamına geliyordu. Mevsimsellikten arındırılmış sanayi üretim endeksi Mart 2008’deki önceki zirve noktasına kıyasla hala % 5.9 aşağıdadır. Bu da, üretim açığının yüksek kalmaya devam ettiğine ve dolayısıyla enflasyonun bir süre daha ılımlı seviyelerde kalacağına işaret etmektedir. Önceki ay sanayi üretiminin kaydettiği belirgin yükseliş hakkındaki yorumumuzda, talep koşullarının yılın ikinci yarısında zayıflamasıyla birlikte, bu üretim seviyelerinin kalıcı olacağına dair şüphelerimiz olduğunu dile getirmiştik. Haziran ayına ait bu yeni verinin bizim endişelerimizi doğrular nitelikte olduğu ve yavaş bir toparlanma senaryosuyla uyumlu olduğu görülüyor. Bu görünüm Merkez Bankası’nın faizleri bir süre daha düşük seviyelerde tutma politikasını desteklemektedir.
* AB kaynaklı yavaşlama geride mi kaldı?... Kapasite kullanım oranı Temmuz ayında, önceki aya göre 1.1 puan arttı ve % 73.1 olan piyasa beklentisinin üzerinde gerçekleşerek % 74.7 oldu. Bizim hesapladığımız mevsimsel düzeltilmiş verilere göre ise kapasite kullanım oranı gözle görülür bir şekilde 1.2 puanlık bir artış sergileyerek % 73.1’e çıkmıştır. Mevsimsel olarak düzeltilmiş kapasite kullanımın Ekim 2008’den beri en yüksek seviyeye gelmesi önemli bir iyileşme olduğuna işaret etse de, mevcut seviye üretim açığının enflasyonu baskı altında tutmaya yetecek seviyelerde kalmaya devam ettiğini düşündürmektedir.
* Bütçe performansında sınırlı bozulma... Haziran ayında merkezi yönetim bütçesi 2.1 mlr TL faiz dışı açık verdi. Böylece, geçen yılın aynı dönemine denk gelen 1.4 mlr TL’lik faiz dışı açıktan daha kötü bir performans sergilenmiş oldu. Ekonomik aktivitedeki canlanmanın desteğiyle, vergi gelirlerinde iyileşme devam etmiş ve yıllık bazda % 23 artış olmuştur. Ne var ki, faiz dışı harcamalardaki belirgin artış faiz dışı dengenin zayıflamasına yol açmıştır. Sosyal güvenlik harcamaları ve mahalli idarelere ayrılan paylardaki artış bütçe görünümündeki bozulmadan sorumlu olan temel etmenler gibi görünmektedir. Bahsi geçen iki kalem için yapılan harcama bu yılın en yüksek seviyesinde olmuştur. Bir kerelik gelirleri kapsamayan ve temel eğilimi yansıtması açısından daha önemli olan program tanımlı bütçe rakamlarını da hesapladık. Bizim tahminlerimize göre, program tanımlı merkezi yönetim bütçesi bu yıl Haziran ayında 2.3 mlr TL faiz dışı açık vererek, geçen yılın aynı dönemindeki 2.0 mlr TL açığa kıyasla daha zayıf gerçekleşmiştir. 12 aylık birikimli olarak bakıldığında, program tanımlı merkezi yönetim bütçe harcamalarının GSYH’ye oranı 0.1 puan artışla % 22.1’e çıkmıştır. Diğer yandan, gelirlerin GSYH’ye oranı da benzer bir artış göstererek % 21.6’ya yükselmiştir ve buradaki iyileşme trendi korunmuştur. Bu gelişmeler de bütçedeki bozulmanın gider tarafından kaynaklandığını göstermektedir.
* Bu arada, KİT’leri, Sosyal Güvenlik Kuruluşlarını ve bütçe dışı fonları da kapsayan konsolide kamu sektörüne ait faiz dışı denge rakamlarını da hesapladık. KİT’ler için Mart, bütçe dışı fonlar ve İşsizlik Fonu için ise Nisan verilerine ulaşabiliyoruz. Geri kalan dönem için henüz açıklanmayan verilerin de önceki yıla benzer değerlerde olacağını varsayarak yaptığımız hesaplamalara göre, 12 ay birikimli faiz dışı dengenin GSYH’ya oranı Haziran 2010 itibariyle önceki ayki % 0.1 faiz dışı fazla seviyesinden % 0.0’a gerilemiştir. Bildiğimiz gibi hükümetin konsolide kamu sektörü hedefi 2010 sonu için GSYH’nın % 0.3’ü oranında bir faiz dışı açık idi. Yılın ikinci yarısında, ekonomideki yavaşlamanın vergi gelirleri üzerinde yaratacağı olumsuz etki nedeniyle, bütçe performansı sınırlı bir bozulma gösterebilir. Eğer harcamalar da, genel seçimlere yaklaşılan bu dönemde artış gösterirse, bütçedeki zayıflama belirginleşebilir. Yine de, ekonomideki canlanmanın desteğini ve bütçe için baz döneminin kriz koşullarını yansıtan zayıf bir dönem olmasını dikkate aldığımızda, bu yılın iddiasız hedefinin tutturulmasında bir problem görmüyoruz.
* Enflasyonun ılımlı seyri Merkez Bankası’nın iyimserliğini destekliyor... Temmuz ayında TÜFE % 0.48 düşüşle, piyasanın tahmini ve bizim beklentimiz olan % 0.3 düşüşten daha olumlu geldi. Bizim öngörümüzden daha sert bir düşüş gösteren gıda fiyatları tahminimizdeki sapmanın tek sebebi oldu. Yıllık enflasyon % 8.4’ten % 7.6’ya gerilerken, biz yıl sonunda TÜFE’nin % 7.2’ye kadar düşmesini beklemeye devam ediyoruz. ÜFE ise aylık % 0.16 gerileyerek beklenen % 0.04 düşüşten daha iyi geldi. Böylece, yıllık ÜFE artışı da önceki ayki % 7.6’dan % 8.2’ye yükseldi. Çekirdek fiyat göstergelerinde de olumlu bir görünüm vardı. Merkez Bankası’nın en fazla önem verdiği çekirdek fiyat göstergesindeki ( I ), (gıda, alkollü içecekler, tütün, altın hariç) yıllık artış önceki aya göre 0.4 puanlık belirgin bir düşüşle % 4.5 olmuştur. Geçen yıl Temmuz ayında, birçok dayanıklı tüketim malındaki geçici vergi indirimlerinin geri çekilmesi yüksek baz etkisi oluşturarak, yıllık çekirdek enflasyonun düşmesinde etkili olmuştur. Hesapladığımız mevsimsel düzeltilmiş rakamlara göre çekirdek gösterge aylık bazda % 0.3 artmıştır ki bu yine oldukça düşük bir seviyedir. Bu arada, trend göstergesi olan, yıllıklandırılmış iki aylık fiyat değişimi ise % 2.2 seviyesinde kalmış ve fiyatlar üzerinde yukarı yönlü baskı olmadığını teyit etmiştir. Ayrıca, bizim hesaplamamıza göre hizmet grubunda yıllık enflasyon 0.3 puan düşüşle % 5.5’e gerilemiştir.
* Faiz artırımları 2011 ortalarına kaldı... Ekonomik aktiviteye ilişkin gelen veriler Avrupa kaynaklı yavaşlamanın sonuna yaklaşıldığını düşündürse de, enflasyonist baskıların yakın dönemde yeniden ortaya çıkmasını beklemiyoruz. Bu veri Merkez Bankası’nın halihazırda gevşetmiş olduğu para politikası duruşuna bir değişiklik getirmemekle birlikte, Banka’nın bu duruşunu destekler niteliktedir. Biz 2011 yılının Mayıs ayında faiz artırımlarının başlamasını ve gelecek yılın tamamında 200 baz puana ulaşmasını beklemeye devam ediyoruz.

So what is the myterious p--- word?...

Just a small breather- the fiscal rule parody

I am continuing with my archiving process, but wanted to pause for a small breather, as I have a couple of items I need to get out of my system right away.

First, I'd like to share with you my five cents on the fiscal rule. Just to recap: It was announced in the middle of last month that the fiscal rule would be postponed until October, which, along, with the disappointing June fiscal figures, led me to devote my Hurriyet column to fiscal affairs the following week. A couple of weeks later came Fin. Min. Mehmet Simsek's remarks that it wouldn't matter if the fiscal rule weren't approved this year, which, unsurprisingly, was not taken well by the market. The Fin.Min. was quick to note that he was misunderstood, but we first learned about the correction in a note by the J.P. Morgan Turkey economist, who wrote that the Fin.Min. had called him personally to correct the misunderstanding.

It was kind of funny to see a phone call reported in a research note. Knowing that the Fin. Min. had passed on information with potential to affect prices to an investment bank in advance was not. As innocent as this might seem, and although I am sure that things like this happen a lot in advanced countries as well, behind closed doors, I was surprised and a bit disappointed that the media did not approach the incident from this angle...

Finally, it hit the wires this morning that rating agencies were not very happy to the fiscal rule after a minister was honest enough to note that a couple of high-spending ministries had opposed the fiscal rule. A fellow economist who has wrong been critical of the agencies was firing again this morning, questioning Turkey's unfair sovereign ratings. As much he wonders how Turkey is rated below Egypt, I am wondering how the agencies could be so naive about the IMF agreement and the fiscal rule. But maybe the answer is the same to both questions...

This time, I am really back...

I guess I was hurrying when I declared I was back a few days ago.

But this time, I am really back and I am starting archiving my Hurriyet columns right away. Then, I will be completing and posting the incomplete posts sitting in draft. So it is work in progress for the next couple of days or so:

It should be business is usual Thursday or so the latest.

Weekly Hurriyet Column: The war of the think tanks

Below is the unedited version of my column for this week. You can read the final version at the Daily News website, but since I have been editing my columns myself on the Daily News website since March, you won't see much of a difference between the two. As for the title, you may have thought I had in mind a historical reference, but it was again from the movies: At the beginning of the movie, Hugh Grant's character is invited to the competition, "The Battle of the 80s Has-beens"- believe it or not, that's where I got my inspiration from.

Coming to more serious matters, after a chat with Umit Ozlale, one of the authors of the TEPAV report and an email exchange with Zumrut Imamoglu, of BETAM report fame, I confirmed my gut feelings that the two reports are not contradicting each other: I think the main confusion was the notion that the TEPAV report felt like saying Turkish exports had lost their prominent position in the EU, but as Umit confirmed, this was not the point: As I am emphasizing at the end of the second paragraph, the TEPAV report is about a lost opportunity, not a lost market...

Anyway, on to the column:

The Ankara-based think tank TEPAV caused quite a stir at the end of July with a policy note provocatively titled, “Export Losses in the EU Market.”

The short note argues, by comparing pre and post-crisis episodes, that there has been an “axis slide” in the EU and Turkey, with both looking beyond the EU for export markets. The article and Bahçeşehir University think tank BETAM’s policy note “Turkey in the EU Market and Its Competition,” written in response to the TEPAV piece, both show that EU powerhouses France and Germany have lost some EU export share in the aftermath of the crisis. The TEPAV report’s main point is that Turkey has not been able to capitalize on this gap.

Digging a bit further yields interesting results: Although Turkey has not lost its share in the EU market, with the exception of apparel, it has been outperformed by Asia in labor-intensive goods like textiles and by new EU members, or EU-12, in capital-intensive products such as autos.

There are certainly many factors at play here, such as EU-12’s better success at attracting foreign direct investment, or FDI, of late, flight from quality, high price and income sensitivity of Turkey’s main export products, or even sectoral specifics, as commercial vehicles, which make a bulk of Turkish motor vehicle exports, were not included in EU support programs.

But Ümit Özlale, one of the authors of the TEPAV report, argued in a phone chat that this could also be reflecting Turkish exporters’ inability, despite notable improvements in the last decade, to diversify their products as much as the competition. He specifically highlighted the Chinese, who are usually flexible enough to produce the whole quality range of a product.

As for Turkey’s own axis slide, while Turkish Exporters Association, or TEA, sees the term as an insult, to me, it reflects, more than anything, the deftness of Turkish exporters, who have shifted their exports, with commendable government support, to other markets following the import demand slowdown in the EU. The report makes a similar point, noting that Turkish exporters’ part of global supply chains might have responded to multinational firms’ change in specialization strategies.

But as Özlale noted, the trick is to be able to gain new markets without losing the EU, which provides home to half of Turkish exports. According to his calculations, the 156 percent rise in exports to the Middle East and North Africa, or MENA, when coupled with the 11 percent fall in exports to the EU, resulted in a limited 5 percent overall gain.

TEA was quick to come up with its own report, aptly titled “The Analysis of the TEPAV Report,” which is just not my cup of tea: They basically make a bunch of footnote-worthy criticisms such as the time frame and choice of currency of the report, which do not change its main results at all. But by trying to divert attention from the real issues and burying their heads in the sand, they are in fact shooting themselves in the foot.

Take the EU’s axis slide: It would have important implications for Turkey if it were a structural phenomenon rather than a crisis response. What if Germany and France had eyes on the MENA market? Would Turkey be able to compete with them? Or are exports to MENA lower in quality or value added than exports to the EU? Despite accusations of being controlled by unnamed powers, TEPAV is in fact doing TEA a big favor by following up on their study with such issues.

While I had high hopes for a war of the think tanks, the disagreement turned out to be just a difference in nomenclature, as TEPAV was working in percentage changes and BETAM in market shares.

As for the other responses, it hurts me to say that they seem to have been all but tanked.

Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at http://emredeliveli.blogspot.com.

I am Back!!!

A friend and loyal reader recently emailed me the following:

I see that your blog posts are way down, which means either that you're working very hard at Konda or you're out partying in the big city.

Well, I was definitely not partying; I am too old for that, although I could make an exception if Pascal came and took me to the disco:) I was working hard at Konda, about which you can read in the previous week's Hurriyet column, but that wasn't the main deal: As you might have read in a blog post or in Twitter/Facebook, my aunt had a quite serious aneurysm operation, which Gottseidank went well, but caused a standstill to my blogging- it also made me think about an efficient blood exchange model,  as we struggled to get blood from nine people with 0RH+ blood type, I could not get very far by myself since I don't know much micro theory and still less market design, but I did talk to some serious theorists, more on that later.

Anyway, I'll start with what I always do after a long break: I have quite a few unfinished posts sitting around as drafts as well as a couple of Hurriyet columns that need publishing, so I'll start with those, so you'll see a bunch of posts with past dates on them in the next 24 hours- as I have mentioned before, I always stick to original dates for archiving purposes. But I am hoping that it will be business is usual by the weekend if not by Friday.

Becoming a Tourism Expert in Ukraine

This is one of those pieces that should have been posted during my long absence- it sat in my drafts for two weeks, and is now seeing daylight thanks to my archiving efforts. I am posting it to the original date it was intended for- i.e. when the article appeared on Kommersant:

I was contacted by Anton Semyzhenko, journalist at Ukrainian business daily Kommersant, for a few questions and an interview on Turkish tourism on August 2- they had struggled finding a Turkish tourism professional willing and able (in English) to talk to them- no sarcasm here, the human capital in the sector is one of the focal points in the tourism column I will be writing in the next few weeks. They had some specific questions and were also wondering if I was willing to grant them an interview. As a last hope to save the article, they had asked for help from the Hurriyet Daily News Economics editor, who had given them my email. 

Being your friendly neighborhood economist, I told them they were in luck, as not only I was an economist, but also was involved in our family business, which is a hotel in Marmaris as Facebook friends would know- and accepted their request. You can see the results of the half-an-hour interview by clicking here. And if you are wondering how the thing looked like in hard copy, here's the interview:

By the way, the table at the bottom of the article in the hyperlink is expenditures per tourist numbers, which I sent to Anton to support my point that the increase in incoming tourists was not reflecting as increased profits. That table, as well as, the two graphs below (somehow, they are not in the web edition) are all from my good friends at Turkey Data Monitor, who are about to launch the version 2 of their excellent product:

Anyway, just last week (I am writing these lines in the afternoon of August 15), I got contacted by Anton again, who wanted to get my thoughts on the recent decision by the Rixos group to discontinue with the all-inclusive concept at a couple of their hotels. I told them why they could do that in some of their hotels but not others as well as give them a few more tips. Since I only spoke for a few minutes, I did not follow up to see under what capacity my comments had appeared.

So, it is now official: Although I don't speak a word of Ukrainian, I have become a Turkish tourism expert in Ukraine:)... But if a group of hillbilly Jewish American soldiers can pull off (please be patient with the hyperlink, as it takes ages to download, since youtube is banned in my beloved country, this was the only link I could find) acting as an Italian film crew without speaking a word of I-talian, I don't see why I can't:)