Call for Interest Rate Cuts from the Istanbul Chamber of Commerce to Banks

Istanbul Chamber of Commerce President Şekib Avdagiç announced that the Turkish economy recorded a growth rate of 2.3 percent in the second quarter of the year. Pointing out the recovery in industry, Avdagiç stated that they expect banks to lower loan interest rates in parallel with the CBRT's interest rate cuts.

Economic Growth and Sectoral Distribution

Istanbul Chamber of Commerce President Şekib Avdagiç stated that, according to the announced data, the Turkish economy grew by 2.3 percent in the second quarter of the year. Emphasizing that as the ITO they look not only at the speed of growth but also at which sectors it comes from, Avdagiç stated that the sub-breakdowns present a more promising picture. The industrial sector, which contracted by 0.8 percent in the first quarter, entered positive territory by growing 2.4 percent in the second quarter.

Foreign Trade and Agriculture Data

Stating that there is a more positive outlook on the foreign trade front compared to the previous quarter, Avdagiç noted that exports of goods and services dropped by 12.7 percent in the first quarter, while this contraction eased to 3.4 percent in the second quarter. Conveying that net foreign demand was more favorable during this period when imports decreased by 6.4 percent, Avdagiç noted that they found the 13.3 percent increase in agriculture valuable and that quarterly growth rose from 0.1 percent to 1.1 percent.

Construction Sector and Investment Trends

Reminding that the construction sector contracted by 1.9 percent, Avdagiç recalled that there was also a noticeable slowdown in investment appetite, with investments increasing by only 0.6 percent in the second quarter. Pointing out that the recovery of industry and the closing of the loss in exports are promising, Avdagiç expressed that the sustainability of the recovery depends on investments regaining momentum.

Loan Interest Rates and Financing Expectation

Drawing attention to the pressure of costs on the real sector, Avdagiç noted that they expect the statements regarding banks lowering loan interest rates in parallel with the CBRT's 300 basis point cut to be materialized rapidly. Highlighting the importance of access to finance for production and export-oriented investments, Avdagiç stated that their expectation is for this reduction to spread rapidly to commercial loans and across the entire sector.