Turkey: playing the long game
Despite a weak start to 2015, the blip in Turkish cement demand is likely to be relatively short-lived. Although continued political and hence, economic uncertainty are expected to impact near-term cement consumption, the longer-term forecast is much more positive. Large-scale infrastructure developments and a revival in housing projects are the main factors behind these attractive future growth prospects. By Cem Emre Bilgin, Garanti Securities, Turkey.
Domestic politics are continuing to be the main source of weakness for the Turkish economy. Following June’s general election, coalition talks have been held between the four parties represented in parliament (ie, AKP, CHP, MHP and HDP), but they have so far failed to reach an agreement on the establishment of a coalition. Therefore, snap elections in the next few months are expected and the results will have a crucial bearing on the country’s political and macroeconomic outlook. However, this persistent uncertainty has been putting pressure on public and private investment as well as weakened consumer confidence. This is likely to take a toll on construction sector demand and, therefore, cement consumption in the second half of 2015.