More on Turkish expectations surveys
The bi-weekly Central Bank of Turkey, or CBT, expectations survey does not offer much new:
As you can see, end-year inflation expectations fell, and 2011 growth expectations were revised upwards, neither a big surprise after June inflation came in lower-than-expected and 1Q11 growth was higher than expectations. However, I will continue with current account expectations, as I did last time, to illustrate the flawed nature of these expectations:
End-year current account expectations have not moved much since the last expectations, despite many analysts cutting their end-year and year-average oil price forecats after the International Energy Agency’s decision to supply 60 million barrels of oil. The rule of thumb every Turkey economist knows is that a $10 fall in the oil price would decrease the country’s current account deficit by $4 billion. So how come year-end current account expectations stayed unchanged?
Or maybe I am expecting too much of the survey respondents, or at least some of them: I heard that the Research Department of a major bank was reporting monthly changes in their report on the current account until late. You probably know this is not a good idea because of seasonality, but just to illustrate:
Of course, not all respondents are like that. Many research houses use sophisticated (and more importantly internally-consistent) methods to forecast the current account, but their projections go into the same data-gathering process as the guy who doesn’t know seasonality, or the guy who is just giving a number close to the current figure.
So the theme, as in the previous post on this topic: Don’t make much of these expectations surveys…
Comments are closed.
