Macroeconomic Outlook (Tacirler Yatırım )

A challenging journey
We foresee robust growth dynamics in the first quarter, followed by a
palpable contraction in domestic demand in the second half. Our 2024
GDP growth estimate remains at 3%, albeit with associated downside risks.
The tightening financial conditions and escalating costs are likely to
accelerate the decline in the industrial sector, presenting downward risks to
our growth projections. Furthermore, the faster-than-expected erosion of real
wages could precipitate a more rapid slowdown in domestic demand.
We do not anticipate the annual CPI to dip below 60% until July 2024.
Our projection suggests inflation peaking around 75% in May, followed by a
decline of nearly 30 percentage points during the summer months, with a
year-end CPI of 43%. While we view the CBRT’s year-end inflation forecast of
36% for 2024 as optimistic, we believe recent measures have fortified the
Bank's position in combating inflation.
We expect the tight monetary policy stance to persist in the wake of the
local elections. President Erdoğan's moderate statements and conciliatory
remarks from the main opposition post-local elections indicate that political
uncertainty may not be at the forefront in the near term. Hence, our focus
going forward will be on whether there will be a decrease in FX demand
following the elections. While we expect the individual demand for FX to
settle down in the coming period, if such a cooling does not occur, we
believe that the risks to the 50% policy rate could be tilted upwards.
We anticipate the ongoing decline in the CA deficit to persist on an
annual basis. The impact of conventional monetary policy and tightening
conditions on credit growth and domestic demand will become pronounced
in the latter half. Concurrently, with tourism performance and foreign market
recovery, we expect the current account deficit to further narrow this year.
We anticipate the decline in the CA deficit to persist in annual terms. We
expect to see the significant effects of the traditional monetary policy and
tightening conditions on credit growth and domestic demand in the second
half. Alongside the performance of tourism and the recovery process in our
foreign markets, we expect the current account deficit to continue decreasing
this year. Our expectation for the year-end CA deficit is USD33bn.
The financing aspect remains challenging, with the external financing
requirement to gross foreign exchange reserves ratio hovering at
around 187%. The restoration process of FX liquidity will be pivotal in the
wake of the local elections, not only for stabilizing the CBRT’s reserves but
also for rebuilding confidence in TL assets. It’s noteworthy that the absence
of the ambitioned rise in foreign demand at the beginning of this year is a
cause for concern.
We expect the 2024 budget deficit to fall below the Medium-Term
Economic Program (MTEP) forecast. With the bulk of earthquake
expenditures absorbed in the 2023 budget, we anticipate the 2024 budget
deficit to be below the MTEP forecast, with a projected budget deficit/GDP
ratio of 5.2% in 2024.

 Tacirler Yatırım Menkul Değerler A.Ş.
  www.tacirler.com.tr
                                 
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                               Yasal Uyarı
 
  Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.