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Inflation Surges 70% In Turkey On Higher Energy Prices And Weakening Lira

Inflation Surges 70% In Turkey On Higher Energy Prices And Weakening Lira

Authored by Katabella Roberts via The Epoch Times,

Inflation in Turkey hit…

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Inflation Surges 70% In Turkey On Higher Energy Prices And Weakening Lira

Authored by Katabella Roberts via The Epoch Times,

Inflation in Turkey hit a 20-year-high in April as the country continued to battle rising rates, further exacerbated by the conflict in Ukraine and supply chain issues, according to data published by the Turkish Statistical Institute on May 5.

Consumer price inflation soared to 69.97 percent per year in April, and 7.25 percent monthly, driven by high global energy prices and the weakening lira.

A Reuters poll forecast annual consumer price inflation to be 68 percent and monthly at 6 percent.

The surge in consumer prices was driven by an annual 105.9 percent increase in transportation, and an 89.1 percent jump in food and non-alcoholic drinks prices, the data showed, while furnishings and household equipment jumped 77.64 percent.

Communication, clothing and footwear, education, and health saw the lowest increases, according to the data, although the increases were still felt in large cities such as Istanbul, where many are now turning to local discount markets to purchase cheaper garments.

Month-on-month, food and non-alcoholic drink prices rose the most at 13.38 percent as supermarkets are consistently being forced to change their prices on an almost weekly basis, while house prices rose 7.43 percent.

In recent months, properties in less affluent areas of Istanbul have increased substantially in price, and many, including the wider ex-pat community in the city, have instead resorted to renting out rooms in shared houses.

Apartments that were previously rented to tenants for around 4,000 Turkish lira ($270) this time last year are now upwards of 9,000 lira ($605), meaning that many of them remain empty despite increased demand.

Meanwhile, annual energy inflation climbed to 118.2 percent from 102.9 percent in March, Bloomberg reported.

Elsewhere on Thursday, official data showed that the domestic producer price index climbed 7.67 percent month-on-month in April for an annual rise of 121.82 percent.

Despite Turks feeling the pressure as the country reaches its highest level of inflation since early 2002, President Recep Tayyip Erdogan and his ruling party have continued to put pressure on the central bank to cut interest rates several times and fired those who resisted, thus further weakening the lira.

Erdogan, a staunch opponent of high interest rates, has said inflation will fall under a new economic program, which prioritizes low interest rates to boost investment, production, exports, and employment, aimed at achieving a current account surplus.

However, opponents and economists argue that lowering interest rates will only lead to higher inflation, and given that Turkey’s economy is reliant on imported goods in multiple sectors like energy and raw materials, Erdogan’s policy has translated to further pressure on consumer prices, despite tax cuts on basic goods and government subsidies for things like electricity bills.

Central bank Gov. Sahap Kavcioglu last week said annual inflation will peak at around 70 percent by June before declining to near 43 percent by the end of the year and single digits by end of 2024.

Disinflation will begin in the next few months “thanks to a gradual decrease in supply-demand mismatches and disruptions in supply chains, in addition to the results of the steps taken for price stability,” Kavcioglu said.

The central bank governor also noted that inflation was being further exacerbated by the ongoing war in Ukraine, and tightened COVID-19 restrictions in China which have further impacted the supply chain, stating that inflation would decrease gradually with monetary policy and the restoration of “global peace.”

He also said that tourism is expected to increase in Turkey this year. Visitors from Russia and Ukraine are the most popular each year to NATO member Turkey, which shares a maritime border with Ukraine and Russia in the Black Sea.

Erdogan, who has opposed the multiple Western sanctions imposed on Moscow over the invasion, has called on both sides to come to an agreement regarding a ceasefire.

Tyler Durden Thu, 05/05/2022 - 10:00

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Government

Cruise Line Drops Pre-Cruise Covid Testing Rule

The major cruise lines walk a delicate line. They need to take the actual steps required to keep their passengers safe and they also need to be aware of…

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The major cruise lines walk a delicate line. They need to take the actual steps required to keep their passengers safe and they also need to be aware of how things look to the outside public. It's a mix of practical covid policy balanced with covid theater.

You have to do the right thing -- and Royal Caribbean International (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Lines (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Lines (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report have been doing that with very meticulous protocols-- but you also have to show the general public you're taking the pandemic seriously. The cruise industry has been under the microscope of both public perception and the Centers for Disease Control (CDC) since covid first appeared.

That's not because you're likely to get infected on a cruise ship than at a concert, sporting event, theme park, restaurant, or any other crowded space. It's because when you get sick at one of those locations nobody can pinpoint the source of your infection

Cruises last from 3 days to 7 days or even longer and that means that some people will get covid onboard and that will be blamed on the cruise industry. To mitigate that Carnival, Royal Caribbean, and Norwegian have rigid protocols in place that require passengers 12 and over to be vaccinated as well as pre-cruise covid tests taken no more than two days before your cruise leaves.

Once cruise line has dropped that testing requirement (at least on a few sailings) and that could lead Royal Caribbean, Carnival, and Norwegian to follow. 

Sina Schuldt/picture alliance via Getty

Holland America Drops Some Covid Testing

As the largest cruise lines sailing from the U.S., Royal Caribbean, Carnival, and Norwegian don't want to be the first to make major covid policy changes. They acted more or less in tandem when it came to loosening, then dropping mask rules and have generally followed the lead of the CDC, even when that agency's rules became optional.

Now, Holland America cruise line has dropped pre-cruise covid testing on a handful of cruises. It's a minor move, but it does provide cover and precedent for Royal Caribbean, Carnival, and Norwegian to eventually do the same.

"Holland America Line becomes the first US-based cruise line to remove testing for select cruises. Unfortunately for those taking a cruise from the United States, the new protocols are only in place for certain cruises onboard the company’s latest ship, the Rotterdam, in Europe," Cruisehive reported.

The current CDC guidelines do recommend pre-cruise testing, but the cruise lines into following those rules. By picking cruises sailing out of Europe, Holland America avoids picking a fight with the federal agency just yet, but it will be able to gather data as to whether the pre-cruise testing actually helps.

Holland America has not changed its vaccination requirements for those cruises which mirror the 12-and-up rule used by Royal Caribbean, Carnival, and Norwegian.

Some guests have called for the end of the testing requirement because they believe it's more theater than precaution because people can test and then contract covid while traveling to their cruise.

The Current Cruise Protocols Work

Royal Caribbean President Michael Bayley does expect changes to come in his cruise line's covid protocols, and he talked about them during Royal Caribbean's recent President's Cruise, the Royal Caribbean Blog reported.

"I think pre cruise testing is going to be around for another couple of months," Bayley told passengers during a question and answer session. "We obviously want it to go back to normal, but we're incredibly cognizant of our responsibilities to keep our crew, the communities and our guests safe."

People do still get covid onboard despite the crew being 100% vaccinated and all passengers 12 and over being vaccinated, but the protocols have worked well when it comes to preventing serious illness.

Bayley said that the CDC shared some information with him in a call.

"The cruise industry sailing out of the US ports over the past 12 months and how many people have been hospitalized with Covid and how many deaths occurred from Covid from people who'd sailed on the industry's ships, which is in the millions," he said, "And the number of people who died from COVID who'd sailed on ships over the past year was two."

That success may be why the major cruise lines are reluctant to make changes. The current rules, even if they're partially for show, have been incredibly effective.

"Two is terrible. But but but against the context of everything we've seen, that's it's truly been a remarkable success." he added.

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International

Tesla Rivals Challenge Its Lead as Nio Sets Encouraging Record

Tesla’s rivals are not even coming close to producing and delivering EVs at the same rate as the Austin, Texas-based market leader.

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Tesla's rivals are not even coming close to producing and delivering EVs at the same rate as the Austin, Texas-based market leader.

Electric vehicle makers have been struggling over the last two years to produce and deliver cars, trucks and SUVs despite obstacles such as supply chain disruptions, semiconductor shortages and factory shutdowns caused by the covid pandemic.

The industry's leading EV manufacturer Tesla  (TSLA) - Get Tesla Inc. Report on July 2 said that plant closures at its Shanghai gigafactory in April and May and supply chain disruptions led to a smaller number of deliveries than expected in its second quarter ending June 30 with 254,695, which was 26.7% higher than the same period in 2021, but 17.7% lower than its record of 310,048 delivered in the first quarter of 2021. Analysts were originally expecting about 295,000 deliveries.

Tesla's production declined to 258,580 vehicles in the second quarter compared to 305,407 in the first quarter. It had produced 305,840 vehicles in the fourth quarter of 2021.

Tesla's rivals are not even coming close to producing and delivering EVs at the same rate as the Austin, Texas-based market leader. But they keep trying.

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Tesla Rivals Struggle to Produce and Deliver Volume of EVs

Tesla rival Nio  (NIO) - Get NIO Inc. American depositary shares each representing one Class A 蔚来汽车 Report on July 1 said that it had delivered 12,961 vehicles in June for a 60.3% year-over-year increase and its highest number of monthly deliveries ever. The company also reported 25,059 EVs delivered in the three months ending June 2022, increasing by 14.4% year-over-year. Nio has delivered a cumulative 217,897 EVs as of June 30.

NIO on June 15 rolled out its ES7, a new mid-large five-seat smart electric SUV, which is the first SUV product based on NIO's latest technology platform Technology 2.0. NIO also launched the 2022 ES8, ES6 and EC6 equipped with the upgraded digital cockpit domain controller and sensing suite, enhancing the computing and perception capabilities as well as digital experience of the vehicles. The company expects to start deliveries of the ES7 and the ES8, ES6 and EC6 in August.

Chinese EV maker XPeng  (XPEV) - Get XPeng Inc. American depositary shares each representing two Class A 小鹏汽车 Report on July 1 said it delivered 15,295 vehicles in June, a 133% increase year-over-year; 34,422 in the second quarter ending June 30 for a 98% increase year-over-year and 68,983 in the first six months of the year for a 124% increase year-over year.

The Guangzhou, China-based company said in August it will begin accepting orders for its new G9 SUV with an official launch in September.

Beijing-based Li Auto  (LI) - Get Li Auto Inc. Report on July 1 said it delivered 13,024 EVs in June, a 68.9% increase year-over-year and 28,687 in the second quarter ending June 30 for a 63.2% increase year-over-year. The company on June 21 began taking orders for its Li L9 SUV and recorded 30,000 orders as of June 24, according to a statement. Test drives will begin July 16 with deliveries beginning by the end of August.

GM Follows Behind Tesla and Other Rivals

General Motors  (GM) - Get General Motors Company Report had 7,300 EV sales in the second quarter, according to a July 1 statement. The Detroit automaker's sales included deliveries of the BrightDrop Zevo 600 delivery van, GMC Hummer EV pickup, and the resumption of the Chevrolet Bolt EV and Bolt EUV production.

GM said the Cadillac Lyriq production is accelerating, with initial deliveries in process. Orders for the 2023 model year sold out within hours and preorders for the 2024 model opened on June 22.

The company said it will gradually increase production of the Cadillac Lyriq and GMC Hummer EV Pickup in the second half of 2022. 

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Spread & Containment

Tesla EV deliveries fall nearly 18% in second quarter following China factory shutdown

Tesla delivered 254,695 electric vehicles globally in the second quarter, a nearly 18% drop from the previous period as supply chain constraints, China’s…

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Tesla delivered 254,695 electric vehicles globally in the second quarter, a nearly 18% drop from the previous period as supply chain constraints, China’s extended COVID-19 lockdown and challenges around opening factories in Berlin and Austin took their toll on the company.

This is the first time in two years that Tesla deliveries, which were 310,048 in the first period this year, have fallen quarter over quarter. Tesla deliveries were up 26.5% from the second quarter last year.

The quarter-over-quarter reduction is in line with a broader supply chain problem in the industry. It also illustrates the importance of Tesla’s Shanghai factory to its business. Tesla shuttered its Shanghai factory multiple times in March due to rising COVID-19 cases that prompted a government shutdown.

Image Credits: Tesla/screenshot

The company said Saturday it produced 258,580 EVs, a 15% reduction from the previous quarter when it made 305,407 vehicles.

Like in other quarters over the past two years, most of the produced and delivered vehicles were Model 3 and Model Ys. Only 16,411 of the produced vehicles were the older Model S and Model X vehicles.

Tesla said in its released that June 2022 was the highest vehicle production month in Tesla’s history. Despite that milestone, the EV maker as well as other companies in the industry, have struggled to keep apace with demand as supply chain problems persist.

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