Having recently looked at Russia, one of the first things to
note about Turkey is that it has some key elements which mirror those of
Russia. We should expect to see some parallels with things that unfold in
Turkey in 2013-14 and those in Russia in 2015-16. Having said that, the
similarities are superficial – the fundamentals come from very different
sources
Rather like Russia too, one of the background themes for
Turkey this year has been Syria. But the situation here is very different with
Turkey having to manage the border refugee problem.
2013
Economically, initially matters were not too bad, with
perhaps the greatest problem being Turkey’s increasing credit levels and
corresponding housing boom.
February was characterised by Erdogan’s attempts to reform the
justice system among other matters.
But there was a
notable shift in the mood of Turkey from late May as protesters gathered in
Taksim. The situation dominated Turkey’s political and economic news throughout
June and into early July.
One of the side effects was a fall in both the Lira and the
stock market.
Fortunately, despite threats to get heavy handed in the end
the approach to the protesters was more moderated and the eventually ended in
the first half of July with them having remained mostly peaceful
However the impact of the protests and the closeness of
Syria together with events elsewhere such as India, led to further market
declines and the need to raise interest rates ( against the preference of the
leadership) in the last week of July and again in late August.
The last two months of the year are mainly positive,
however, despite the continued pressure of the Syrian situation. We can
probably expect improvements in economic statistics to lead to market uplifts
in both currency and stocks in the short term.
2014
Some of the heavier issues from 2013 carry over into 2014,
but they may become more pronounced. There may be more Syria related
difficulties in the first few months and maybe more protests. The emphasis
looks to be more on bordering nations now though. The period right the way
through to May is characterised by events which make Turkey the focus of
attention. These are likely to include more debt and interest rate activity.
There are again more signs of currency and stock market weakness as the period
progresses and these may be accompanied by reduction in consumption and
spending leading to poorer economic stats. Pollution is another risk from now
through 2015.
By May there is a focus on the constitutional underpinnings,
although there does seem to be some respite from other problems at this time
with more freedom to indulge for the people.
The background themes though continue throughout the year
and June to august is no exception. However it is likely to be a quitter period
than the same time in 2013, and although there is less expansion there is still
a positive mood.
September and October may again be tricky financially, it is
possible that the issues are not necessarily local ones but they affect the
country nevertheless.
There are issues over rights but these are not too
difficult, there does not seem to be too much conflict amongst the people at
this time. The issues are all financial.
In the last 2 months there is some return to the instability
of summer 2013 and spring 2014. This might lead to some crackdowns on public
activity which may well continue into 2015.
January and February 2015 are similar in tone to the first
part of 2014.
There are both risks instability or other difficulties and
financial challenges. The financial ( currency) situation is magnified
throughout the first half of this year.
However at this point
government and people are at one
March to May is more mixed and although there may need to be
adjustments made, there is no indication of the type of challenges felt
earlier.
And although we haven’t got rid of all the background
issues, there period of June and July is actually quite positive. There may be
some credit excesses but the people are feeling relatively benign.
As a result more can be achieved in resolving some of the
deep seated internal and external issues in the period August and September.
There is a real sense of concrete achievement and a turning point being
reached.
However earthquakes may be indicated at this time too.
Further steps forward are taken in October to December, but
this time not without some serious instability. Balancing growth and personal
freedoms may prove hard and debt reorganisations may be necessary.
In November there may be an attempt to subdue some political
or economic activity by the government.
2016 starts with an improved background environment- much of
the tough conditions are over. However there are likely to be some influences
which supress growth and innovation or
individuality in the short term, but these are a small price to pay for the
generally more stable conditions
April and June sees this theme continuing but with a
counterbalancing theme which suggests that the tensions are constructive and
will lead to a consolidation of the positive innovation with managed growth.
There might be one or two surprise announcements in July and
August that shake things up a bit but
overall the conditions continue to be, on balance, calm and pleasant.
There might be a brief return to some of the past stresses
in September and October but this is only likely to be a reaction to the very easy conditions of the
preceding months.
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