2025-09-08 09:01

Annual medium-term programme is roadmap for economy GDP growth forecast at 3.3% in 2025, 5% in 2028 VP Yilmaz expects disinflation to carry on this year Last year, Turkey forecast single-digit CPI by 2026 Yilmaz: FX interventions rare, address extreme moves ANKARA, Sept 8 (Reuters) - Turkey's government expects inflation to slow to 28.5% this year and to 16% in 2026 before dropping to single digits the following year - about a year later than previously predicted, according to an economic roadmap announced on Monday. In its annual medium-term economic programme, which covers the next three years, the government also forecasts economic growth would slow to 3.3% this year as tight monetary policy weighs, before it rebounds and returns to around trend growth of 5% in 2028. Sign up here. Vice President Cevdet Yilmaz, presenting the programme in Ankara, said disinflation will continue through year end, supported by fiscal policies and the moderate course of commodity prices. Authorities intervene at times to smooth "extreme" moves in the foreign-exchange rate, Yilmaz said, but added that Turkey has a floating FX regime and no target for the lira currency. The lira slipped to 41.2650 against the dollar on Monday, on track for another record low close after a year in which it has depreciated slowly but steadily. The inflation forecast marked a retreat from last year's medium-term programme in which the government predicted single-digit consumer price inflation by 2026, not 2027. Last month, annual inflation was higher than expected at nearly 33%. That, combined with unexpectedly high GDP growth in the second quarter, prompted analysts to predict the central bank will slow its rate cuts to only 200 basis points this week. RECOVERY AFTER CRISIS The major emerging market economy is slowly coming out of a protracted economic crisis that sent inflation soaring and the lira plunging since 2018, due largely to unorthodox low interest-rate policies championed by President Tayyip Erdogan. Since mid-2023, a new cabinet and central bank leadership have reversed course with tight monetary policy - including a policy rate raised as high as 50% - meant to rein in inflation that had soared as high as 85%. In July, the central bank cut rates by 300 basis points to 43%, relaunching an easing cycle it had paused in March due to market turmoil over a widespread legal crackdown on the main opposition party. Markets were jolted again last week when a court ousted the party's Istanbul provincial head, dealing another judicial blow to Erdogan's opponents and triggering falls in shares and bonds. Finance Minister Mehmet Simsek, also presenting the programme, said there were no "extraordinary" market moves in the last week and that it was not possible to isolate the potential economic impact of any domestic political issues. FORECASTS The programme, released around midnight in the Official Gazette, forecast economic growth of 3.3% in 2025, 3.8% in 2026 and 5% in 2028, and added that potential GDP growth was expected to rise by 0.5% during this time due to structural reforms. Tourism revenues were expected to rise to $75 billion by 2028 from $64 billion this year. Exports were seen climbing to $308.5 billion by 2028 from $273.8 billion this year. The unemployment rate was expected to be relatively stable this year and next year at 8.5%. The current account-to-GDP ratio was forecast to be 1.4% in 2025, before reaching 1% in 2028. The current account deficit was seen narrowing to $18.5 billion by 2028, from $22.6 billion this year, while the budget deficit was forecast to widen from 2,208.3 billion lira ($53.55 billion) this year to 2,805.1 billion lira in 2028. The programme also listed a series of planned structural reforms ranging from transitioning into digital or high value-added technology industries to a green transformation and ways to increase agricultural efficiency. ($1 = 41.2358 liras) https://www.reuters.com/world/middle-east/turkey-forecasts-285-inflation-this-year-single-digits-by-2027-2025-09-07/

2025-09-08 08:33

LONDON, Sept 8 (Reuters) - The pound hovered largely unchanged on Monday, having posted its biggest one-day rally against the dollar in two weeks on Friday, following surprisingly weak U.S. employment data that has cemented expectations for a U.S. rate cut this month. Sterling was last unchanged on the day at $1.3513, having risen by 0.5% on Friday, when the dollar came under heavy pressure following the August nonfarm payrolls report that showed just 22,000 jobs were created last month and far fewer were created in the prior months, too. Sign up here. Traders are fully expecting a quarter-point cut from the Federal Reserve when it meets next week and a high chance of identical cuts in October and December. The Bank of England, which also meets next week, is barely expected to deliver even one rate cut in the remainder of this year, given UK inflation remains well above the central bank's 2% target and the economy is slowing, but without obvious signs of a more serious weakening. This divergence creates a theoretical advantage for sterling and UK assets in general, as investors stand to benefit from higher British interest rates versus those elsewhere. Sterling shrugged off UK Prime Minister Keir Starmer's cabinet reshuffle on Friday after the resignation of his deputy, which did not affect finance minister Rachel Reeves. The pound was also steady against the euro, which traded at 86.8 pence. "There's no UK data of note this week and few Bank of England speakers. We suspect euro/sterling can trade in a 86.50-87.00 range this week, given that next week's BoE meeting and news on quantitative tightening plans will be far more interesting," strategists at ING said in a note. Against the Japanese yen, sterling rallied to one-month highs above 200 , after Japanese Prime Minister Shigeru Ishiba said he would resign on Sunday. Ishiba said he was taking responsibility for his Liberal Democratic Party's election losses earlier this year. https://www.reuters.com/world/uk/sterling-holds-firm-against-dollar-after-weak-us-jobs-report-2025-09-08/

2025-09-08 08:14

Finance minister says Japan's trade deal provides reference Foreign minister sees any deal similar to Japan's problematic Officials negotiating details of investment package South Korea's trade deal to include foreign exchange policy SEJONG, South Korea, Sept 8 (Reuters) - South Korea will take into account Japan's trade agreement with the U.S. as a reference as it negotiates final details of its own trade deal and pins down details on a pledged $350 billion investment package, the finance minister said on Monday. "There are pros and cons for us. What is positive is that because we know the outcome of Japan's negotiations, we can negotiate with the U.S. based on it," Minister Koo Yun-cheol told a press conference. Sign up here. Separately, South Korea's foreign minister said Seoul would not accept the same terms agreed in Japan's deal, which also includes a $550 billion package. President Donald Trump signed an executive order implementing Japan's trade deal last week, but South Korea is yet to reach a written agreement on the deal struck in July between its team led by Koo and the U.S. leader. The Japanese deal lowering U.S. tariffs on imports of its cars to 15% from 25% has put South Korean automakers, which still face 25%, at a competitive disadvantage. "We will consult with the U.S. in a way that meets the national interest as much as possible," Koo said. South Korea and the U.S. were negotiating on details of a $350 billion investment package included in the deal and Seoul would seek ways to launch various investment projects in the U.S. in an effective manner, he said. Seoul was also in talks with the U.S. over foreign exchange policy, which will be included when the two sides announce the results after trade negotiations conclude, Koo said. In a parliamentary session on Monday, Foreign Minister Cho Hyun said Seoul's trade negotiations were being delayed because it was taking a tough stance on U.S. demands regarding the investment package and said similar terms would cause problems. "If you look at the agreement between the U.S. and Japan, you will understand why our government is delaying negotiations," he said, without elaborating. Japan's trade deal with the U.S. was struck under the terms that available free cash flows from its $550 billion investment package would be split in half until reaching an allocated amount and then 90% would go to the United States. Last week, Trump's administration asked the U.S. Supreme Court to swiftly hear a bid to preserve his sweeping tariffs pursued under a 1977 law meant for emergencies, after a lower court invalidated most of the levies that have been central to the Republican president's economic and trade agenda. Koo said authorities were taking into account every possible scenario, but said it remained "more pressing than ever" to respond to various external changes, such as tariffs. He vowed to prepare new strategies by October to respond to fundamental changes in the global trade order. https://www.reuters.com/world/asia-pacific/south-korea-says-finalise-us-trade-deal-by-learning-japan-agreement-2025-09-08/

2025-09-08 07:46

NICOSIA, Sept 8 (Reuters) - Cyprus has approached the United Arab Emirates for possible cooperation on an EU-financed subsea power cable linking Europe to the eastern Mediterranean region, it said on Monday, reaffirming its commitment to the project. European prosecutors said last Thursday that they had launched an investigation into possible criminal offences relating to the 1.9 billion euro ($2.2 billion) cable to link Greece with Cyprus and later to Israel, a project all three countries say they support despite a series of delays. Sign up here. "To cite just one example that proves this political commitment of ours, I myself and the foreign minister visited the United Arab Emirates," Cypriot President Nikos Christodoulides told reporters after comments from Greek Prime Minister Kyriakos Mitsotakis at the weekend urging Cyprus to clarify its views on the matter. "I met with the president of the country precisely to discuss this issue and to consider the possibility of a joint partnership ... to invest in other areas related to this project." Christodoulides did not comment on the European investigation announced last week. The cable is being built by Greek transmission operator IPTO, which took over in late 2023 from a Cyprus-based operator that had been working on the project for about a decade. Project promoters say the link would be the world's longest high-voltage cable at 1,240 km (770.5 miles) and also the deepest, at 3,000 metres. Cyprus has repeatedly sought clarifications on the total cost of the project, its viability and any liabilities for unforeseen delays. ($1 = 0.8532 euros) https://www.reuters.com/world/middle-east/cyprus-talks-uae-over-european-subsea-cable-project-president-says-2025-09-08/

2025-09-08 07:14

8 members of OPEC+ to lift output from October by 137,000 bpd Russia hits Ukraine with biggest air attack of war Trump says European leaders will visit US to discuss Russia-Ukraine war TOKYO, Sept 8 (Reuters) - Oil prices climbed more than $1 on Monday, regaining some of last week's losses, helped by the prospect of more sanctions on Russian crude after an overnight strike on Ukraine. OPEC+ flagged plans to further increase production from October but the amount was modest. Sign up here. Brent crude climbed $1.24, or 1.9%, to $66.74 a barrel by 0640 GMT, while U.S. West Texas Intermediate crude rose $1.17, or 1.9%, to $63.04 a barrel. Both benchmarks fell more than 2% on Friday as a weak U.S. jobs report dimmed the outlook for energy demand. They lost more than 3% last week. OPEC+, which includes the Organization of the Petroleum Exporting Countries plus Russia and other allies, agreed on Sunday to further raise oil production from October. OPEC+ has been increasing production since April after years of cuts to support the oil market. The latest decision comes despite a likely looming oil glut in the northern hemisphere winter months. Eight members of OPEC+ will lift production from October by 137,000 barrels per day. That, however, is much lower than increases of about 555,000 bpd for September and August and 411,000 bpd in July and June. "The oil market was supported by relief over OPEC+'s modest output hike and a technical bounce following last week's decline," said Toshitaka Tazawa, an analyst at Fujitomi Securities, adding the OPEC+ output hike had been priced in since last week. "Expectations of tighter supply from potential new U.S. sanctions on Russia are also lending support," he said. U.S. President Donald Trump said on Sunday he is ready to move to a second phase of sanctioning Russia, the closest he has come to suggesting he is on the verge of ramping up sanctions against Moscow or its oil buyers over the war in Ukraine. New sanctions on buyers of Russian oil could disrupt crude flows, energy trader Gunvor's [RIC:RIC:GGL.UL] global head of research and analysis, Frederic Lasserre, said on Monday. Russia launched its largest air attack of the war on Ukraine, setting the main government building on fire in central Kyiv and killing at least four people, Ukrainian officials said on Sunday. Trump said on Sunday that individual European leaders would visit the United States on Monday and Tuesday to discuss how to resolve the Russia-Ukraine war. "Buying emerged as the OPEC+ output increase was smaller than anticipated, while fading prospects for peace in the Russia-Ukraine war and views that Russian oil won't flood the market also supported prices," said Satoru Yoshida, a commodity analyst with Rakuten Securities. In a note over the weekend, Goldman Sachs said it expects a slightly larger oil surplus in 2026 as supply upgrades in the Americas outweigh a downgrade to Russia supply and stronger global demand. It left its Brent/WTI price forecast unchanged for 2025 and projected the 2026 average at $56/$52 a barrel. https://www.reuters.com/business/energy/oil-gains-prospect-more-sanctions-russia-opec-output-hike-seen-modest-2025-09-07/

2025-09-08 07:06

Top credit rating for Russia's Gazprom paves the way for yuan bond issuance Russia and China agreed to build Power of Siberia 2 pipeline Rating can also be used in Gazprom's transactions with Chinese banks, counterparties - source SHANGHAI, Sept 8 (Reuters) - Chinese rating agency CSCI Pengyuan assigned its highest AAA rating to U.S.-blacklisted Russian oil and gas giant Gazprom (GAZP.MM) , opens new tab on Friday, paving the way for any debt issuance in China's domestic bond market. Western rating agencies including Moody's, Fitch and S&P Global Ratings have withdrawn credit ratings for Gazprom and many other Russian companies due to the Russia-Ukraine conflict. Sign up here. Accessing China's bond market, the world's second-biggest, would be a boon for Russian companies cut off from Western financing due to sanctions. "The high rating from an independent foreign rating agency confirms Gazprom's financial stability and indicates the company's strong creditworthiness," Gazprom Deputy CEO Famil Sadygov said in a statement. The long-term issuer rating on Gazprom will not necessarily lead to an imminent issuance of yuan-denominated bonds by the Russian company, said a source with direct knowledge of the situation. But the rating paves the way for potential yuan bond issuance in the future, though that requires approval from Chinese regulators who will take geopolitical risks into consideration, said the source, who was not authorised to speak publicly. The "AAA" rating for Gazprom with a stable outlook came just days after Russia and China gave their blessings to the Power of Siberia 2 pipeline, a massive gas project linking the two countries as they seek to reduce economic reliance on the West. Gazprom made the announcement about the project during Russian President Vladimir Putin's visit to China last week. "Gazprom's rating reflects its strategic importance and legal ties to the Russian government," CSCI Pengyuan said. The firm's credit profile "is underpinned by its strong business profile as one of the market leaders in the global oil and gas industry and its important position in Russia's energy market," it added. Late last month, senior Chinese financial regulators told top Russian energy executives that they would support their companies' plans to sell yuan "panda bonds", the Financial Times reported on Sunday, citing sources. Companies typically obtain credit ratings before selling bonds in China. Such issuer ratings can also be used in transactions with Chinese banks and in deals with Chinese counterparties, said the source with knowledge of the situation. GEOPOLITICAL RISKS In an analysis of Gazprom's outlook alongside its rating decision, CSCI Pengyuan cited "high geopolitical risks" associated with the energy company, which was sanctioned by the U.S. following Russia's invasion of Ukraine in 2022. "Sanctions and geopolitical disruptions have adversely affected the company's operations, leading to a decline in gas export revenue and volume in 2023," the rating agency said. "As the geopolitical landscape continues to evolve, operational uncertainties persist." Last month, CSCI Pengyuan also assigned a "AAA" credit rating to Zarubezhneft, a mid-scale upstream oil company fully owned by the Russian Federation. A decade ago, China and Russia were in talks on a framework to allow Russia to issue yuan-denominated bonds, but little progress has been made. https://www.reuters.com/business/energy/chinese-agency-assigns-aaa-rating-russian-energy-giant-gazprom-2025-09-08/