Reading Macroeconomic

Indicators

Sorbonne – BMI / International Executive MBA

Economics – September, 2022

İstanbul

Erhan Aslanoğlu
Basic Concepts
 GNP ( Gross National Product)
(Goods and Services produced by factors of production owned by a country)
 GDP (Gross Domestic Product)
(Goods and services produced by the factors of production within the
boundries of a country)
 GNP = GDP + Net Factor Income from Abroad

NFIFA  Labor Income +, -

Profits +, -
Interest Payments +,-
 Net Domestic Product = GDP – Depreciation

 Net National Income = GNP - Depreciation

 Domestic Income = Net Domestic Income – Indirect Taxes

 National Income = Net National Income – Indirect Taxes

 Nominal GDP = GDP at Current Prices

 Real GDP = GDP at Constant Prices

Example:
2007  Q0 = 3 P0 = 2
2008  Q1 = 5 P1 = 3 Q: Quantity P:Price
 Nominal GDP
2007  Q0 * P0 = 3 * 2 = 6
2008  Q1 * P1 = 5 * 3 = 15

 Real GDP
2007  Q0 * P0 = 3 * 2 = 6
2008  Q1 * P0 = 5 * 2 = 10

--- $ GDP = (Nominal GDP) / (Average Annual $ / TL)

Real Interest Rate;

Real Interest Rate : Nominal Interest Rate –12 Month Expected Inflation

If interest rates and inflation figures are high;

Real Interest Rate = ((1+Nominal Interest Rates) / ( 1 + 12 Month Expected Inflation)) - 1

• Ex – Ante (expected)
• Ex – Post (realized)
GDP at Purchasing Power Parity (PPP)

Example

Per Capita Income ($) PPP ($) PPP ($)

USA 56000 7$ 7$ 56000
Turkey 8000 1$ 3,5$ 28000

Soup Price USA 7$ 1 Soup

Turkey 2$ 1/2 Soup
Growth Rate

( Real GDP / Real GDP) * 100

((10-6) / 6) *100 = % 66.6

Cycles
 Expansion
Growth

 Contraction
Recession (at least two subsequent quarters of
negative growth)
Depression (long lasting recession...)
Stagflation (negative growth and inflation)
Deflation (negative inflation)
Interest – Parity Condition

Et = Nominal Exchange Rate, it = Domestic Interest Rate, i’t = Foreign Interest

Rate

 1 + it= (1 / Et ) (1 + i’t) (Ee t+1)

Et = ((1 + i’t) / (1 + it )) * (Ee t+1)

 Example: (1$= 18,5, TL) (t) i’t = % 3,25

1$=25 (t +1 ) ..........25 *103,25=2581
it should be at least 2581 / 1850 = 1,3952

Suppose you have 1850 TL....Question is where to invest ? Home or abroad?

Current Issues of the World
Economy
 Energy Crises in Europe

 China; Covid Lockdowns, Real Estate Market Problems

 Recession in USA ?

 Major Central Banks Monetary Policies

Global Economic Outlook

Kaynak : Trading Economics

Kaynak : Trading Economics
Growth in World Economy (%)
2015 2016 2017 2018 2019 2020 2021-E 2022-E 2023-E
World 3,5 3,2 3,8 3,6 2,8 -3,1 6,1 3,2 2,9
USA 2,9 1,5 2,2 2,9 2,2 -3,4 5,7 2,3 1,0
Euro Area 2,1 1,8 2,4 1,8 1,3 -6,3 5,4 2,6 1,2
Japan 1,4 0,9 1,9 0,8 0,7 -4,5 1,7 1,7 1,7
Africa 3,4 1,4 2,8 3,0 3,2 -1,7 4,6 3,8 4,0
Middle East 2,5 4,9 2,2 1,8 1,4 -2,8 5,8 4,8 3,5
Brazil -3,6 -3,5 1,0 1,1 1,1 -3,9 4,6 1,7 1,1
Russia -2,5 -0,2 1,6 2,3 1,3 -2,7 4,7 -6,0 -3,5
China 6,9 6,7 6,8 6,6 6,1 2,3 8,1 3,3 4,6
India 8,2 7,1 7,2 7,1 4,2 -7,3 8,7 7,4 6,1
Türkiye 6,1 3,2 7,4 2,6 0,9 1,8 11,0 4,0 3,5
Source: IMF - World Economic Outlook, July - 2022
Gas Prices

Kaynak : Trading Economics

Is Global Recession Imminent ?

Kaynak : World Bank , 09-22 (Is global recession is imminent ?)

Purchasing Managers Index (PMI) Manufacturing)
Global Inflation Peaks
Inflation in USA
DXY – Dollar Index

Kaynak : Trading Economics

Euro / Dollar Parity
Dollar Index and Industrial Commodity Prices
Stocks and Commodities
Copper Prices and Commodities
Global Markets;
Current Trends Near Future

 Commodity – / Negative Negative

 USD – / Positive Positive / Neutral

 Gold - / Negative Neutral / Positive

 Stocks– / Negative Neutral

Growth and Inflation of Türkiye
Business Tendency Statistics

Source:CB
PMI (August 22) ve Industrial Output (June 22)

Kaynak: ISO
Kaynak :OECD
Economic Variables
and Financial Markets
Financial Markets react if the announced macroeconomic

indicators are different than market expectations.

Economic Growth

Fixed Income ------ GDP   Bond 

GDP  Bond 

Stock Exchange ----- GDP   Stocks 

GDP  Stocks 

FX Market ------ GDP   $ 

GDP  $ 
 Suppose expected US non-farm employment for
September 2022 is ; + 525,000

 Announced figure is + 860,000

USA Türkiye
at 08:35......T- Bills ? at 15:40.....T. eurobonds S&P 500 ? BIST-100
€/$ ? $/TL
Inflation
Medium Term Programme (MTP) 2023-2025
 2022 BUDGET BALANCE TABLE OF CENTRAL GOVERNMENT BUDGET

(Thousand TL)
Total /
2022 Total
Jan-Augus t -22 Budget
Budget Targe t
Targe t (%)
Budget Expe nditures 1.735.193.022 2.831.472.499 61,3
1-Excluding Interes t 1.561.198.543 2.501.672.499 62,4
Compensation of Employees 379.620.884 613.640.701 61,9
Social Security Contributions 59.793.800 97.151.314 61,5
Good and Service Purchase 126.905.016 214.813.979 59,1
Current Transfers 715.981.685 1.078.290.824 66,4
Capital Expenditures 107.975.463 206.348.299 52,3
Capital Transf ers 20.466.623 23.627.332 86,6
Lending 150.455.072 201.622.930 74,6
Reserve Appropriation 66.177.120
2-Inte res t 173.994.479 329.800.000 52,8
Budget Re ve nues 1.768.319.918 2.553.098.555 69,3
1-General Budge t Reve nue s 1.730.328.423 2.523.412.609 68,6
Taxes 1.474.496.534 2.185.950.088 67,5
Property Income 74.669.886 83.747.888 89,2
Grants and Aids and Special Revenues 21.073.096 14.220.208 148,2
Interest, Shares and Fines 150.412.228 223.806.088 67,2
Capital Revenues 8.505.243 13.884.939 61,3
Collections f rom Loans 1.171.436 1.803.398 65,0
2-Spe cial Budget Ins titutions 28.737.639 19.623.651 146,4
3-Re gularity & Supe rvis ory Ins titutions 9.253.856 10.062.295 92,0
Budget Balance 33.126.896 -278.373.944 -11,9
Balance Excluding Inte re s t 207.121.375 51.426.056 402,8

Source: Treasury
Balance of Payments
 2021 Jan.- 2022 Jan.-
Balance of Payments (mill. USD) 2017 2018 2019 2020 2021 (*)
July July

A- CURRENT ACCOUNT -40.877 -21.740 5.303 -35.537 -13.590 -13.677 -36.672

1. Exports 169.214 178.909 182.200 168.387 224.691 120.235 144.189
2. Imports 227.789 219.635 198.981 206.250 253.978 136.800 194.556
Balance on Goods -58.575 -40.726 -16.781 -37.863 -29.287 -16.565 -50.367
3. Services: Credit 53.481 58.627 62.741 35.429 57.511 25.382 42.027
4. Services: Debit 27.148 28.453 28.657 23.891 30.839 15.848 21.864
Balance on Goods and Services -32.242 -10.552 17.303 -26.325 -2.615 -7.031 -30.204
5. Primary Income: Credit 4.959 6.131 6.331 6.221 6.724 4.047 4.295
6. Primary Income: Debit 16.119 18.075 19.156 15.613 18.756 11.478 10.279
Balance on Goods, Services and Primary Income -43.402 -22.496 4.478 -35.717 -14.647 -14.462 -36.188
7. Secondary Income 2.525 756 825 180 1.057 785 -484
B. CAPITAL ACCOUNT
C. FINANCIAL ACCOUNT -41.458 11.427 -1.269 -7.618 -29.849 -17.471 -4.431
8. Direct Investment: Net acquisition of financial assets 2.703 3.590 2.945 3.239 6.447 2.245 2.913
9. Direct Investment: Net incurrence of liabilities 11.190 12.505 9.573 7.831 13.840 6.125 6.110
10. Portfolio Investment: Net acquisition of financial assets -583 1.092 6.342 2.894 2.260 -365 4.421
11. Portfolio Invesment: Net incurrence of liabilities 23.857 176 3.579 -6.662 3.056 3.521 -7.645
12. Other Investment: Net acquisition of financial assets 4.605 12.281 8.789 -1.884 13.401 9.465 13.578
13. Other Investment: Net incurrence of liabilities 13.136 -7.145 6.193 10.698 35.061 19.170 26.878
D. NET ERRORS AND OMISSIONS -8.803 22.710 -282 -3.907 7.135 10.208 24.347
GENERAL BALANCE 8.207 10.377 -6.324 31.862 -23.330 -13.964 7.925
E. RESERVE ASSETS -8.207 -10.377 6.324 -31.862 23.330 13.964 -7.925

Kaynak :TCMB
Türkiye’nin Dünya’da En Büyük 10 İhracatçı Arasında Olduğu Ürünler, 2019
Türkiye'nin Türkiye'nin
Türkiye'nin Ürünün Dünya'da
Dünya Dünya
Ürün Kodu Ürün Tanımı İhracat Miktarı Sofistikasyon Yapılan Toplam
Pazarındaki Pazarındaki
(milyar $) Sırası (1-1018) İhracat
Sırası Payı
HS0802 Diğer kabuklu meyveler (taze/kurutulmuş) (kabuğu çıkarılmış/soyulmuş) 2 1,68 8,8% 983 19,1
HS1101 Buğday unu/mahlut unu 1 1,05 22,1% 913 4,8
HS5702 Dokunmuş halılar, yer kaplamaları (kilim, sumak, karaman vb) 1 2,13 45,5% 849 4,7
HS6002 Diğer örme mensucat (en<=30cm, elastomerik/kauçuk iplik=>%5) 5 1,50 4,9% 625 30,6
HS6104 Kadın/kız çocuk için takım elbise, takım, ceket, panolon vs. (örme) 4 1,26 3,9% 921 32,5
HS6109 Tişört, fanila, diğer iç giyim eşyası (örme) 2 2,77 7,3% 940 37,8
HS6110 Kazak, süveter, hırka, yelek vb. eşya (örme) 6 1,99 4,0% 920 50,2
HS6115 Külotlu, kısa; uzun konçlu çorap, soketler (örme) 2 1,10 7,9% 763 13,9
HS6203 Erkek/erkek çocuk için takım, takım elbise, ceket vs. 6 1,61 3,7% 877 43,6
HS6204 Kadın/kız çocuk için takım, takım elbise, ceket vs. 6 3,11 5,1% 881 61,4
HS6302 Yatak çarşafı, masa örtüleri, tuvalet, mutfak bezleri 4 1,20 6,2% 937 19,4
HS7113 Kıymetli metaller ve kaplamalarından mücevherci eşyası 10 5,11 4,4% 757 115,0
HS7208 Demir/çelik sıcak hadde yassı mamulleri-genişlik 600mm. Fazla 9 1,77 4,0% 397 44,5
HS7214 Demir/çelik çubuklar (sıcak haddeli, dövülmüş, burulmuş, çekilmiş) 1 2,80 19,8% 897 14,2
HS7216 Demir/alaşımsız çelikten profil 3 1,07 8,6% 710 12,5
HS7306 Demir/çelikten diğer tüpler, borular, içi boş profiller 6 1,12 5,0% 682 22,4
HS7308 Demir/çelikten inşaat ve aksamı 9 1,38 2,7% 434 50,9
HS8409 İçten yanmalı, pistonlu motorların aksam-parçaları 10 1,77 2,6% 169 67,1
HS8418 Buzdolapları, dondurucular, soğutucular, ısı pompaları 7 1,97 4,3% 321 45,6
HS8450 Çamaşır yıkama makineleri 4 1,04 7,6% 411 13,7
HS8516 Elektrikli su ısıtıcıları, elektrotermik cihazlar (şofbenler) 9 1,19 2,3% 361 50,8
HS8702 Toplu halde yolcu taşımağa mahsus motorlu taşıtlar 3 2,06 11,3% 420 18,2
HS8704 Eşya taşımaya mahsus motorlu taşıtlar 8 4,91 3,6% 400 136,1
HS9403 Diğer mobilyalar vb. aksam, parçaları 9 1,76 2,0% 435 89,3

Kaynak : Birleşmiş Milletler The Observatory of Economic Complexity», United Nations, Kendi Hesaplarımız
 FX Market
 Balance of Payments Demand Supply 12/20 12/21

 Current Account - + - 35,5 -13,6

 Capital Account - + 7,6 29,9
 Net Errors and Omis. - + -4 7,1
----- - 31,9 G.B +
23,3
 FX Deposits - + - 37 -2
- 68,9* + 21,3*
* FX Market Balance
Factors Affecting FX Markets;
 Balance of Payments and FX Deposits

 Domestic and Foreign Interest Rates (t , t+1,

t+2,....)

 Risks
Monetary Policy and CDS

Kaynak : Hakan Kara

Ratings
 Basic Rating Criterias

 Institutional Structure and Political Risk

 Economic Structure
 Income Distribution
 Expected Growth
 Fiscal Flexibility
 Public Debt Stock
 Monetary Policy and Price Stability
 Balance of Paymets Flexibility
 Foreign Debt and Liquidty
Risk Anaysis (Institutional)
 Political Risk
– Democracy Indexes (EIU)
- EPU / Uncertainity and Geopolitical Risk
Indexes (policyuncertainity.com)
- Country Election Dates
 Operational Risk

– Global Competitiveness Index (World Economic Forum)

- Doing Business Index (World Bank)
Leading Indicators
Economic Structure and Domestic Fragility
Growth and Volatility
Per Capita Income
Inflation
Sector and Product Diversity
Change in Real Sector Debt
Change in Household Debt
Change in Nominal House Prices
Share of Foreign Investors in Bond Market
Share of Foreign Investors in Stock Exchange Market
Stock Exchange Index

External Financail Fragility

Current Account Balance / GDP
(Current Account Deficit – Net Foreign Direct Investments) / GDP
Reserve Adequacy = Central Bank Res./ (Short Term Debt + Current Account Deficit)
Real Exchange Rate
Domestic Deposits / FX Reserves

Fragility of Economic Policy

Monetary Policy - Expected Inflation (InflationTarget)
Budget Deficit / GDP
Public Debt / GDP
Real Interest Rates
Thank you for your attention

e-mail : easlanoglu@pirireis.edu.tr

Twitter : @Erhan Aslanoglu