Economy

Dubai hits $2.1bn worth of property deals in the week ending on April 15 

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China data to show sharp March deterioration as COVID bites; Turkish house sales rise — 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 perked up due to a strong start early in the year.

Data on Monday is expected to show gross domestic product grew 4.4 in January-March from a year earlier, a Reuters poll showed, outpacing the fourth-quarter’s 4 percent pace due to a surprisingly solid start in the first two months.

But on a quarterly basis, gross domestic product growth is forecast to fall to 0.6 percent in the first quarter from 1.6 percent in October-December, the poll showed, pointing to cooling momentum.

Separate data on March activity, especially retail sales, is likely to show an even sharper slowdown, analysts say, hit hard by China’s strict efforts to contain its biggest COVID outbreak since the coronavirus was first discovered in the city of Wuhan in late 2019.

Analysts say April readings will likely be worse, with lockdowns in commercial centre Shanghai and elsewhere dragging on. Some economists say the risks of a recession are rising.

Turkish house sales rise 20.6%

Turkish house sales rose 20.6 percent in March on the year to 134,170 houses, data from the Turkish Statistical Institute showed on Friday.

Sales to foreigners rose 31 percent, the institute said, with Iranian citizens topping the list. Iraqis and Russians were the next biggest buyers of Turkish properties, it added.

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

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

Foreign currency revenues

Turkey’s central bank has raised the share of foreign currency revenues that exporters are required to sell to the central bank to 40 percent from 25 percent, a move designed to prop up the country’s foreign exchange reserves.

In January, the government mandated exporters to sell 25 percent of their foreign currency revenues to the central bank, which is seeking to bulk up its reserves depleted during a currency crisis late last year.

On Monday, Reuters reported that the authorities were considering raising the threshold to as much as 50 percent though no decisions were made at the time. 

The central bank’s net foreign currency slumped to a record low of $7.55 billion in January, mainly as a result of market interventions to prop up a tumbling lira. They have risen since, reaching $18.30 billion last week, and Turkish authorities look to export revenues to replenish them further.

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

The central bank also said income from exports to Russia and Ukraine can be submitted in Turkish lira even though it was initially disclosed as foreign currencies.

BoJ likely to raise inflation forecast 

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

While the upgrade will bring inflation closer to its 2 percent target, the central bank will stress its resolve to keep monetary policy ultra-loose to underpin a fragile economic recovery, the sources said.

“Consumer inflation may accelerate to near 2 percent this fiscal year, but mostly due to rising fuel and food costs,” one of the sources said.

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

 

 

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