What lies ahead?

Dünya Executive - - COMMENTARY - Emre ALKIN Colum­nist

This month, we ex­pe­ri­enced a pe­riod in which we fol­lowed pos­i­tive de­vel­op­ments re­gard­ing the bud­get and the cur­rent ac­count deficit. In fact, the only de­vel­op­ment that con­fused peo­ple in Septem­ber, when in­ter­na­tional in­sti­tu­tions gave pos­i­tive mes­sages on For­eign Ex­change Re­serves, was the state­ments of the Banks As­so­ci­a­tion and Bank­ing Reg­u­la­tion and Su­per­vi­sion Agency on non-per­form­ing loans.

We have to take for granted that the Cen­tral Bank’s in­ter­est rate cuts will be at the top of the agenda for a while. How­ever, the Bank did not make an un­ex­pected move. I ex­pect the pol­icy rates to fall to 13-14 per­cent by Jan­uary 2020. The course will de­ter­mine de­vel­op­ments re­lated to in­fla­tion and growth, or the rate at which in­ter­est rates will be cut.

Pub­lic bor­row­ing in for­eign cur­rency is in­creas­ing while the ex­ter­nal debt of the pri­vate sec­tor is de­creas­ing. I asked about this sit­u­a­tion when I met the au­thor­i­ties two weeks ago. “We will bor­row at what­ever in­ter­est level is ap­pro­pri­ate in what­ever cur­rency,” they replied.

In­ter­na­tional or­ga­ni­za­tions sur­prise us

When we look at the for­eign trade side, I can say that we wit­nessed a grad­ual de­crease in the growth rate of ex­ports. Still, the three per­cent in­crease in ex­ports is no small feat con­sid­er­ing the United States barely in­creased, China had dif­fi­culty and Ja­pan failed to in­crease. How­ever, due to both price com­pe­ti­tion and the de­cline in euro/dol­lar par­ity, ex­port in­creases are not dou­ble digit as be­fore. Al­though the tourism sea­son does not end with au­tumn, it can be said that for­eign ex­change in­come will con­tinue with a “di­min­ish­ing in­crease.” In this case, we are likely to ex­pect fluc­tu­a­tions in ex­change rates.

Sur­pris­ingly in­ter­na­tional or­ga­ni­za­tions, which stated that they pre­dicted a 2.5 per­cent con­trac­tion 2019 at the be­gin­ning of the year are now mak­ing fore­casts around zero per­cent. Since I have been ex­pect­ing this since the be­gin­ning of the year, I am not mak­ing any changes and I con­tinue to main­tain my hope. Of course, when I voiced my ex­pec­ta­tion at the be­gin­ning of the year, there were peo­ple who op­posed it. I see that most of those are from Y gen­er­a­tion, not X. That is to say, pre­vi­ous ex­pe­ri­ences jus­tify the per­son in the medium and long term.

I will take care to lis­ten to all kinds of opin­ions that are con­trary to or com­pli­men­tary to my own, and will con­tinue to eval­u­ate the use­ful ones.

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