The Kapali Carsi

The similarity between Turkish PM Erdogan and a Pigeon

Yep, that’s right: Turkish PM Recep Tayyip Erdogan is very similar to a pigeon. Not a dove, I mind you, a pigeon, so don’t have any “peace” images in your mind. I don’t have the size of their brains in mind, either:) Anyway, if you’d like to know how come, have a look at my latest Hurriyet Daily News (HDN) column, where I also explain how the Iraq war is biting the economy. I have a few additional comments to make:

First, even though the Iraq war is effecting the economy more than I expected, not in sectors exporting to Iraq but those not doing any business with the country! (see the column for details), I don’t expect this to affect Turkey’s sovereign credit ratings- despite the cautionary note from Moody’s this week. But the situation is serious enough for the Union of Chambers to try to get Turkish businesses out of truck and minimize their losses.

BTW, Turkish Exporters Association Mehmet Buyukesi stated (in Turkish), during his presentation of the June preliminary exports figures, that exports would have grown 9.1 percent annually rather than 6.6 percent if there had been no conflict in Iraq. He noted, in other words, that the Iraq war pulled down annual export growth 2.5 percent. I have no idea how he came up with this magic number, but I should warn you that exports to Iraq have been volatile generally. Moreover, they have been losing steam of late, even before the start of the conflict.

However, as you can see in the graph, exports to Iraq (blue line, sorry I forgot to label) tend to be in line with overall exports (red line), and so maybe Buyukeksi has a point. I may tackle this issue in a future column or blog.

Moving on, I tried to summarize the week’s data in the column as well- but could not cover everything due to space constraints: Ankara think-tank TEPAV’s retail confidence index continued to fall in June (for more detail, see TEPAV’s note– both links in Turkish), confirming the weakness in consumer confidence I mentioned in the column. In other data of the week, corporates open (FX) position continued to hover in the $ 170bn territory, and house prices continued to rise.

That’s all folks, as I need to leave my office for the France-Germany quarterfinals. Should be great game…

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