Turkey emerges from COVID-19-hit 2020 with 1.8% economic growth

Turkey emerges from COVID-19-hit 2020 with 1.8% economic growth
Propelled by a burst of credit in mid-2020, fourth-quarter GDP grew 1.7 percent from the previous quarter on a seasonally and calendar-adjusted basis. (File/AFP)
Short Url
Updated 01 March 2021

Turkey emerges from COVID-19-hit 2020 with 1.8% economic growth

Turkey emerges from COVID-19-hit 2020 with 1.8% economic growth
  • The cheap lending accelerated a record drop in the lira, drew down the country’s foreign currency reserves and helped push inflation to 15 percent

ISTANBUL: Turkey’s economy grew 5.9 percent in the fourth quarter and 1.8 percent in 2020 as a whole, annual data showed on Monday, emerging as one of only a few globally to avoid a contraction due to the coronavirus pandemic.
Propelled by a burst of credit in mid-2020, fourth-quarter GDP grew 1.7 percent from the previous quarter on a seasonally and calendar-adjusted basis, the Turkish Statistical Institute said.
A surge in gross domestic product (GDP) growth in the second half of the year that surpassed Turkey’s potential rate was driven by a near doubling of lending by state banks to face down the initial wave of the virus.
While outperforming all emerging market (EM) and G20 peers except China, Turkey’s growth came at a price: The cheap lending accelerated a record drop in the lira, drew down the country’s foreign currency reserves and helped push inflation to 15 percent. Also, few jobs were created.
The recovery was “unbalanced and ultimately exacerbated some of the country’s external vulnerabilities,” said Jason Tuvey, senior EM economist at Capital Economics.
Financial sector activity surged more than 21 percent last year, driving overall growth, the data showed. Tourism and other services activity dropped by 4.3% and the construction sector, an engine of growth in years past, shrank 3.5 percent.
The lira firmed to 7.351 against the dollar after the GDP data and was 1 percent stronger on the day.
The volatile currency tumbled last week after a rally that began in early November when Turkish President Tayyip Erdogan promised a new market-friendly economic era. A new central bank chief has since hiked interest rates, cutting credit dramatically.
Finance Minister Lutfi Elvan, appointed in November, said on Twitter Monday that Turkey would prioritize price stability this year. Analysts say the economy should expand by roughly 5 percent in 2021 despite tight monetary policy.
In a Reuters poll, GDP was forecast to have expanded 7.1 percent year-on-year in the fourth quarter of 2020, despite new curfews and curbs on the service sector to address a second COVID-19 wave, and 2.3 percent for the whole year.
World economies mostly contracted and tumbled into recessions last year, with emerging and developing nations shrinking by some 2.4 percent according to the International Monetary Fund.
The major EM economy has cooled in recent years from an average 5 percent growth rate in the last two decades. The rate plunged by 10.3% annually in the second quarter as the pandemic bit, but rebounded sharply by 6.3 percent in the third.
Ankara is considering lifting some of the latest virus restrictions as of this month.
Tuvey of Capital Economics said the shift in November to more orthodox policies helped Turkey avoid “a full-blown balance of payments crisis,” and he predicted a sustained recovery may not come until the second half of this year.


34 US states back Epic Games in anti-trust suit against Apple

34 US states back Epic Games in anti-trust suit against Apple
Updated 28 January 2022

34 US states back Epic Games in anti-trust suit against Apple

34 US states back Epic Games in anti-trust suit against Apple
  • Attorneys-general accuse Apple of stifling competition

OAKLAND, California: Apple Inc. is stifling competition through its mobile app store, attorneys general for 34 US states and the District of Columbia said on Thursday, as they appealed against a ruling that let the iPhone maker continue some restrictive practices.

While dozens of state attorneys general have filed recent antitrust lawsuits against other big tech companies, including Facebook owner Meta Platforms Inc. and Alphabet Inc’s Google, none had so far taken aim at Apple.
Thursday’s remarks, led by the state of Utah and joined by Colorado, Indiana, Texas and others, came in a lawsuit in an appeals court against app store fees and payment tools between “Fortnite” video game maker Epic Games and Apple.
“Apple’s conduct has harmed and is harming mobile app-developers and millions of citizens,” the states said.
“Meanwhile, Apple continues to monopolize app distribution and in-app payment solutions for iPhones, stifle competition, and amass supracompetitive profits within the almost trillion-dollar-a-year smartphone industry.”
The action comes after a US district judge in Oakland, California, mostly ruled against Epic last year.
That decision found that commissions of 15 percent to 30 percent which Apple charges some app makers for use of an in-app payment system the company forced on them did not violate antitrust law.
Epic challenged the ruling in the 9th US Circuit Court of Appeals. On Thursday, professors, activist groups and the states weighed in through court filings that described legal arguments in support.
Apple’s reply is expected in March. On Thursday, the company said it was optimistic that Epic’s challenge would fail.
The states said in their filing that the lower court erred by failing to adequately balance the pros and cons of Apple’s rules and also by deciding that a key antitrust law did not apply to non-negotiable contracts Apple makes developers sign.
“Paradoxically, firms with enough market power to unilaterally impose contracts would be protected from antitrust scrutiny — precisely the firms whose activities give the most cause for antitrust concern,” they said.

 


Apple’s holiday iPhone sales surge despite supply shortages

Apple’s holiday iPhone sales surge despite supply shortages
Updated 28 January 2022

Apple’s holiday iPhone sales surge despite supply shortages

Apple’s holiday iPhone sales surge despite supply shortages
  • Apple to report iPhone sales of $71.6 billion for the October-December period

SAN RAMON, California: Apple shook off supply shortages that have curtailed production of iPhones and other popular devices to deliver its most profitable holiday season yet.
The results posted Thursday for the final three months of 2021 help illustrate why Apple is looking even stronger at the tail end of the pandemic than when the crisis began two years ago.
At that point, Apple’s iPhone sales had been flagging as consumers began holding on to their older devices for longer periods. But now the Cupertino, California, company can’t seem to keep up with the steadily surging demand for a device that has become even more crucial in the burgeoning era of remote work.
Apple’s inability to fully satisfy the voracious appetite for iPhones stems from a pandemic-driven shortage of chips that’s affecting the production of everything from automobiles to medical devices.
But Apple so far has navigated the shortfalls better than most companies. That deft management enabled Apple to report iPhone sales of $71.6 billion for the October-December period, a 9 percent increase from the same time in the previous year.
Those sales gains would have likely been even more robust if Apple could have secured all the chips and other components needed to make iPhones. That problem plagued Apple’s July-September quarter when management estimated that supply shortages reduced its iPhone sales by about $6 billion. The company may address how supply shortages affected its performance in the most recent quarter during a conference call with analysts scheduled later Thursday.
Despite what drag the shortages caused, Apple still earned $34.63 billion, or $2.10 per share, a 20 increase from the same time in the previous year. Revenue climbed from the previous year by 11 percent to $123.95 billion.
Apple’s ongoing success help push the company’s market value above $3 trillion for the first time earlier this month. But its stock price has tumbled 13 percent since hitting that peak amid worries about a projected rise in interest rates aimed at dampening the torrid pace of inflation that has been fueled in part by supply shortages.
Its shares gained more than 3 percent in Thursday’s extended trading after the Apple’s fiscal first-quarter numbers came out.
The supply issues looming around Apple’s devices have magnified the importance of the company’s services division, which is fueled by commissions from digital transactions on iPhone apps, subscriptions to music and video streaming and repair plans.
The up to 30 percent commissions collects from apps distributed through Apple’s exclusive app store have become a focal point of a fierce legal battle that unfolded in a high-stakes trial year, as well as proposed reforms recently introduced in the US Senate that tear down the company’s barriers that prevent consumers from using alternative payment systems.
For now, though, the services division is still booming. Its revenue in the past quarter hit $19.52 billion, a 24 percent increase.
Apple is widely believed to be maneuvering toward another potentially huge money-making opportunity with the introduction of an augmented reality headset that would project digital images and information while its users interact with other physical objects and people. True to its secretive form, the company has never said it is working on that kind of technology.
But Apple CEO Tim Cook has openly shared his enthusiasm for the potential of augmented reality in public presentations, and analysts believe the long-rumored headset could finally roll out later this year — unless it’s delayed by supply shortages.


Lebanon’s finance minister says replacing central bank governor is not ‘wise’

Lebanon’s finance minister says replacing central bank governor is not ‘wise’
Updated 28 January 2022

Lebanon’s finance minister says replacing central bank governor is not ‘wise’

Lebanon’s finance minister says replacing central bank governor is not ‘wise’

BEIRUT: Lebanon’s finance minister said on Thursday replacing the central bank governor, Riad Salameh, today is not “wise.”
Finance Minister Youssef Khalil told local broadcaster MTV that nobody proposed removing the central bank governor, but “I do not imagine changing the central bank governor today is a wise matter.”
Salameh, who has support from several top politicians, is being probed in Lebanon and at least four European countries, with his role under close scrutiny since Lebanon’s economic collapse in 2019.
Salameh denies any wrongdoing during almost three decades leading the central bank.


Aramco CEO says energy transition not going smoothly: Reuters

Aramco CEO says energy transition not going smoothly: Reuters
Updated 27 January 2022

Aramco CEO says energy transition not going smoothly: Reuters

Aramco CEO says energy transition not going smoothly: Reuters

BEIRUT: Saudi Aramco CEO Amin Nasser said on Thursday that the energy transition “was not going smoothly,” pointing to a resurgence in demand for oil and gas as the global economy recovers while supplies lag on the back of falling investment, according to Reuters.

“We all agree that to move towards a sustainable energy future a smooth energy transition is absolutely essential but we must also consider the complexities and challenges to get there,” he told the B20 conference in Indonesia via video link.

“We have to acknowledge that the current transition is not going smoothly,” he said.

- Reuters


SNB board recommends dividends of over $1bn for the second half of 2021

SNB board recommends dividends of over $1bn for the second half of 2021
Updated 27 January 2022

SNB board recommends dividends of over $1bn for the second half of 2021

SNB board recommends dividends of over $1bn for the second half of 2021

RIYADH: Saudi National Bank, the Kingdom’s biggest lender, said its board has recommended cash dividends of SR4.03 billion ($1.1 billion), or 9 percent of capital, for the second half of 2021.

SNB’s shareholders will receive SR0.9 per share, with a total amount of 4.48 billion shares eligible for dividends, a bourse statement by the bank revealed.

This brings the annual dividend yield to 2.12 percent, based on a share price of SR73, given the bank paid out SR0.65 per share for the first half of the same year.

The distribution date is yet to be disclosed, according to the statement.