More on transfers, scandals, reserves
AKP scored a major coup in its endless recruitment drive by snagging CHP Izmir mayor Cemil Tugay. The logic is obvious, the more mayors migrate to, or municipalities are captured fair and foul, the more voting districts where AKP can increase its votes by providing superior service. But, does adding mayors with these methods really increase votes?
The crackdown against Yeni Parti mayors continued, as MHP leader Bahceli suggested his party, too, can open its doors to arrivals from other parties. With pro-Kurdish DEM Party disavowing a new constitution for the sole purpose of granting Erdogan eligibility for another term, AKP-MHP are on their way to achieve that goal by transfers.
The national conversation is still dominated by the Fund Scandal, which shall remain the number one pre-occupation of the nation for the foreseeable future, as the bill presented to the Grand Assembly to compensate victims leaves a lot to be desired. From a political angle, Yeni Party is disclosing new AKP heavyweights alleged to have been involved in the scandal, but whether these claims sway voters can’t be answered yet.
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On the econ side, we briefly go through the data releases of the past week and share a few thoughts on the macroeconomic implications of the “fonzi” scandal.
In a nutshell, industrial production remained weak through August, Turkstat’s seasonally-adjusted data confirmed the improvement in monthly inflation dynamics in September and, we estimate, the cash budget deteriorated in the third quarter.
As for the macro implications of the scandal, there is a lot of alarmist talk, like some observers making comparisons to Turkey’s 2001 crisis or speaking of the possibility of negative monthly CPI prints. But we continue to think these prognostications are somewhat premature. Our take (still) is that the financial losses associated with the current “crisis” are manageable as a percent of the economy, that the connectivity-cum-contagion channel should remain contained and that the confidence effect may prove (relatively) temporary, though we sure are watching the developments carefully.
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