China Data Shows Sharp Deterioration in March as COVID Bites; Home Sales Rise in Turkey — Macro Snapshot

RIYADH: China is expected to report a sharp deterioration in economic activity in March as COVID-19 outbreaks and lockdowns hit consumers and factories, although first-quarter growth may have picked up due to a good start to the year.

Monday’s data is expected to show gross domestic product rose 4.4 in January-March from a year earlier, according to a Reuters poll, beating the 4% pace in the fourth quarter due to a startling start strong in the first two months.

But on a quarterly basis, gross domestic product growth is expected to fall to 0.6% in the first quarter from 1.6% in October-December, the poll said, indicating a slowing momentum.

Separate data on March activity, particularly retail sales, are expected to show an even steeper slowdown, analysts say, hit hard by China’s stringent efforts to contain its biggest COVID outbreak since the discovery of the coronavirus. coronavirus in the city of Wuhan at the end of 2019.

Analysts say April readings are likely to be worse, with shutdowns in the Shanghai Mall and elsewhere dragging on. Some economists say the risks of a recession are growing.

Turkish home sales increase by 20.6%

Turkish home sales rose 20.6% in March on the year to 134,170 homes, data from the Turkish Statistical Institute showed on Friday.

Sales to foreigners increased by 31%, the institute said, with Iranian citizens topping the list. Iraqis and Russians were the next biggest buyers of Turkish properties, he added.

Wealthy Russians are pouring money into real estate in Turkey and the United Arab Emirates, seeking financial refuge in the wake of Moscow’s invasion of Ukraine and Western sanctions, according to many companies real estate.

The data also showed March mortgage sales rose 38.8% from a year earlier to 30,271, accounting for 22.6% of total sales for the period.

Foreign exchange receipts

Turkey’s central bank has increased the share of foreign exchange earnings that exporters are required to sell to the central bank from 25% to 40%, a move intended to bolster the country’s foreign exchange reserves.

In January, the government asked exporters to sell 25% of their foreign exchange earnings to the central bank, which is seeking to boost its reserves depleted during a currency crisis late last year.

On Monday, Reuters reported that authorities were considering raising the threshold to 50%, although no decision was made at the time.

The central bank’s net foreign currency fell to a record low of $7.55 billion in January, mainly due to market interventions to support the falling lira. They have since risen, hitting $18.30 billion last week, and Turkish authorities are looking to export earnings to further replenish them.

Turkey’s exports totaled $225 billion in 2021 and the government and economists predict they will reach $250 billion this year.

The central bank also said export earnings to Russia and Ukraine can be submitted in Turkish lira, even if they were initially disclosed as foreign currencies.

BoJ expected to raise inflation forecast

The Bank of Japan is expected to raise its inflation forecast for this fiscal year to nearly 2% at this month’s policy meeting, as global commodity inflation pushes up energy and utility costs. food, said three sources familiar with the bank’s thinking.

While the upgrade will bring inflation closer to its 2% target, the central bank will underscore its determination to maintain ultra-loose monetary policy to support a fragile economic recovery, the sources said.

“Consumer inflation could accelerate to almost 2% this fiscal year, but mainly due to higher fuel and food prices,” one of the sources said.

“It is too early to withdraw the stimulus as wage growth is slow and the economy is still weak,” the source said.