Latest news with #TurkeyEconomy
Reuters
09-07-2025
- Business
- Reuters
Turkey raises withholding tax on short-term lira deposits to boost budget revenues
GDANSK, July 9 (Reuters) - Turkey has raised the withholding tax on short-term Turkish lira deposits and investment funds by 2.5 percentage points, a move economists said was aimed at boosting budget revenues and curbing dollarisation. For deposit accounts with a maturity of up to six months, the rate was increased to 17.5% from 15%, a decree published in the Official Gazette on Wednesday showed, while for those with a maturity of up to one year, it was raised to 15% from 12%. "Budget revenues are not increasing. Interest payments and non-interest expenditures — especially interest payments — reach 100%. Revenues need to increase. The way to do this is through withholding tax," ALB Yatirim Chief Economist Filiz Eryılmaz said. She also noted that recent outflows from money market funds have been accompanied by strong inflows into free foreign exchange funds, creating increased foreign exchange demand. Eryılmaz highlighted that the second goal is also to reduce dollarization. After interest rates rose, withholding tax on money market funds was kept at zero percent for a long time. "Now that the rate has been raised to 17.5%, the aim is to prevent investor outflows," she said. Eryılmaz said larger interest rate cuts from the central bank should now no longer be expected. "After this, we expect a 250 basis point cut in July. The possibility of a 350 basis point cut has significantly diminished," she added. The central bank will announce its July interest rate decision on July 24. Rising interest in FX funds may be curbed slightly by the new withholding tax, but dollarization will persist due to ongoing political uncertainty, said Marbaş Menkul Degerler analyst Mustafa Kemal Eski. He said the move likely aims to support the government's medium-term fiscal target, noting that 67% of the goal has been met so far, with half of the year still ahead.
Bloomberg
02-07-2025
- Business
- Bloomberg
Turkish Bonds Erase 2025 Loss After Court Delay Spurs Rally
Turkey's lira-denominated bonds erased their year-to-date losses after a court's decision to postpone its ruling on the country's opposition leader spurred a rally of over 3% in just two days. Two-year yields currently stand at 39.76%, having dropped about 200 basis points so far this week, after the court delayed its ruling on a case that could unseat Ozgur Ozel. That's taken borrowing costs back to levels seen just before the March arrest of Istanbul mayor Ekrem Imamoglu triggered a wave of nationwide protests and fueled a selloff in Turkish assets.
Zawya
30-05-2025
- Business
- Zawya
Turkey's economy grew 2.0% in first quarter, below forecasts
Turkey's economy expanded 2.0% in the first quarter of the year, below expectations, official data showed on Friday. First-quarter gross domestic product (GDP) grew 1.0% from the previous quarter on a seasonally and calendar-adjusted basis, data from the Turkish Statistical Institute showed. In a Reuters poll, the economy was forecast to have expanded 2.3% in the first quarter. Turkey's economy had grown 3.0% year-on-year in the fourth quarter of 2024, bringing full-year growth to 3.2% and exceeding forecasts despite the weight of high interest rates. Economists forecast an expansion of 3% in 2025 as a whole, slightly lower than last year, the poll showed, reflecting the effects of monetary tightening. In December, the central bank started an easing cycle after having kept the main policy rate steady at 50% for eight months. Inflation has dipped from as high as 75% last May. In April, Turkey's central bank hiked its policy rate by 350 basis points and raised the lending rate to 49% in response to market turmoil that erupted over the arrest of Istanbul Mayor Ekrem Imamoglu, President Tayyip Erdogan's main political rival. (Reporting by Canan Sevgili in Gdansk; Editing by Tuvan Gumrukcu and Jamie Freed)
Reuters
30-05-2025
- Business
- Reuters
Turkey's economy grew 2.0% in first quarter, below forecasts
May 30 (Reuters) - Turkey's economy expanded 2.0% in the first quarter of the year, below expectations, official data showed on Friday. First-quarter gross domestic product (GDP) grew 1.0% from the previous quarter on a seasonally and calendar-adjusted basis, data from the Turkish Statistical Institute showed. In a Reuters poll, the economy was forecast to have expanded 2.3% in the first quarter. Turkey's economy had grown 3.0% year-on-year in the fourth quarter of 2024, bringing full-year growth to 3.2% and exceeding forecasts despite the weight of high interest rates. Economists forecast an expansion of 3% in 2025 as a whole, slightly lower than last year, the poll showed, reflecting the effects of monetary tightening. In December, the central bank started an easing cycle after having kept the main policy rate steady at 50% for eight months. Inflation has dipped from as high as 75% last May. In April, Turkey's central bank hiked its policy rate by 350 basis points and raised the lending rate to 49% in response to market turmoil that erupted over the arrest of Istanbul Mayor Ekrem Imamoglu, President Tayyip Erdogan's main political rival.
Bloomberg
30-05-2025
- Business
- Bloomberg
Turkey's Economy Expands Less Than Projected in First Quarter
Turkey's economy expanded less than projected in the first quarter despite a brief period of interest-rate cuts. Gross domestic product expanded 1% in the January-to-March period in seasonally and working-day adjusted terms, according to data published by the state statistics office on Friday. That's less than 1.7% in the previous quarter and worse than the median forecast of 1.2% in a Bloomberg survey of economists.
