Macro and Politics

*Istanbul Chamber of Industry (ICI) Turkey April Manufacturing PMI will be announced @ 10:00 local time. The ICI Turkey Manufacturing PMI decreased from 48.3 in March to 47.3, marking its lowest level since October. Consequently, the manufacturing PMI, which averaged 47.73 in 4Q24, showed little change in 1Q25, averaging 47.87. In this context, we expect industrial production (IP) in the first quarter of this year to mirror the performance seen in 4Q24. The adverse impacts of rising domestic angst and increased market volatility as of March 19 have begun to surface in April leading indicators. There are signs that perceptions regarding the overall economic outlook have once again shifted toward pessimism, accompanied by a deterioration in early indicators throughout April. Accordingly, the decline observed in the manufacturing PMI in March is likely to persist in April. While our GDP growth forecast for 2025 remains at 3.1%, we assess that downside risks to this projection are mounting. The combination of tighter financial conditions and recent domestic developments raises the probability of sub-3% growth in 2025.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the period of April 18 – 25 @ 14:30 local time. Due to this week’s public holiday on May 1^st, weekly CBT data, typically released every Thursday, will be published today. To recall the previous period’s data: During the week of April 11 – 18, foreign investors recorded a net purchase of USD269.1mn in the equity market, while they were net sellers in the bond market (excluding repo transactions), registering an outflow of USD970mn, which led to a decline in their share of the total bond stock to 4.8% from 5.2%. In annual terms, the equity experienced a cumulative foreign outflow of USD4bn, while the bond markets (excluding the repo transactions) saw a cumulative foreign inflow of USD10.8bn. In ytd terms, the foreign portfolio flow in the equity and bond market experienced a net outflow of USD646mn and USD5.1bn, respectively. Besides, in the mentioned week, the residents’ total FX deposits (including gold, price adjusted) surged by USD2.4bn. lastly, in the week of April 11 – 18, the CBT’s the gross FX reserves decreased by USD0.9bn to USD146.7bn and the net international reserves dropped by USD0.2bn to USD38.6bn. Total swap stock rose by a mere USD0.1bn to USD18.2bn, while net reserves excluding swaps slid by USD0.4bn to USD20.4bn.