Economy
Boris Johnson hails Türkiye’s infrastructure, urges UK to catch up
Former British Prime Minister Boris Johnson praised Türkiye’s ambitious infrastructure drive during a recent panel on shifting geopolitical dynamics and their impact on the country.
“Türkiye displays a level of dynamism in infrastructure development that the U.K. sorely lacks,” Johnson said, citing Britain’s failure to expand airport capacity in London and the recent cancellation of a high-speed rail project as signs of stagnation.
“And here in Türkiye, you’ve built colossal airports, amazing new infrastructure and high-speed rail,” he said. “It’s a lesson for us.”
“I was very proud when I was mayor of London to build all sorts of things – the Crossrail was the biggest engineering project in Europe,” he noted. “I built lots of river crossings.”
“In the U.K., we have to accept that Türkiye’s ambitions are really inspiring and leaving us behind – the scale and pace of change here since I first came to Türkiye has been extraordinary,” he added. “Türkiye has taken on an ever more important role on the world stage, as a bridge between East and West, but more importantly, as a force for global stability.”
Johnson said Türkiye has done “some great things” as a NATO member and in its involvement with Syria.
“I hope very much that we’ll have some peace and stability in that country,” he said.
The former prime minister added that the U.K. and Türkiye have “a great role together in reassuring the world about the permanence of our values and restoring some common sense where that is necessary.”
Johnson said the first priority should be to end the “miserable” war in Ukraine, while paying “tribute to Turkish efforts” to broker peace.
“In the White House, they are finally understanding that … Ukraine didn’t start this war – Russia is the aggressor,” he said. “I think they always understood that. It’s very clear to President Trump. I think he is now going to start putting real pressure on Vladimir Putin.”
Ahmet Eren, president of the Turkish Finance Accountants’ Foundation (HUV), said the panel has hosted Turkish and international scientists, politicians and experts in recent years to discuss global economic shifts in 2023 and 2024. This year’s edition focused on drawing international attention.
“The panel was planned before U.S. President Donald Trump’s re-election, but his April 2 remarks shook the global economy, making this issue even more important,” Eren said.
“Assessing the effects of Trump’s second term on the global political and economic system is more relevant today than ever,” he added.
The cost of insuring exposure to Türkiye’s sovereign debt fell Wednesday to its lowest level in about six-and-a-half months, as expectations of easing geopolitical risks in the Middle East and steps by the central bank on liquidity management supported investor sentiment.
Türkiye’s five-year credit default swaps – a form of insurance for bondholders – fell to 217 basis points, a level not seen since Feb. 18, days before the U.S. and Israel launched the war against Iran. The premium had soared to above 320 basis points around early April.
Emerging-market risk premiums have generally declined as signs of a possible easing in tensions between the U.S. and Iran raised hopes for renewed diplomatic talks and a more lasting resolution to the conflict.
Reports that the U.S. government is preparing to return diplomats to some embassies evacuated during the war, along with comments from mediating countries that negotiations between the sides could resume, helped improve sentiment.
The developments also eased concerns over energy supplies, sending oil prices sharply lower. Brent crude futures for October delivery fell 3.9% to $88.60 a barrel, while the U.S. 10-year Treasury yield declined about seven basis points to 4.63%.
CBRT liquidity move supports risk sentiment
Domestic developments also contributed to the decline in Türkiye’s risk premium.
The Central Bank of the Republic of Türkiye (CBRT) Monday resumed one-week repo auctions, which had been suspended since March due to heightened market volatility following the outbreak of the Iran war.
During the suspension, banks’ liquidity needs were largely met through the CBRT’s overnight lending facility at a 40% rate.
The resumption of weekly repo operations is viewed as a signal that the central bank was moving back toward its normal operational liquidity framework.
The move strengthened expectations that banks’ funding costs could move closer to the 37% policy rate and that market interest rates could decline.
Türkiye’s two-year bond yield also fell below 40% for the first time since July 2, while longer-dated yields edged down more modestly.
Several factors behind CDS decline
Spinn Consulting founding partner and economist Özlem Derici Şengül said several factors were behind the decline in Türkiye’s CDS, with the biggest immediate impact coming from lower bond yields.
She said inflation expectations and other macroeconomic risks had not yet improved significantly, making the decline in bond yields a more important driver of the fall in the country risk premium.
According to Şengül, the resumption of weekly repo auctions could also be considered one of the factors, but she noted this is yet to be reflected in actual funding costs.
“The factors coming to the fore are global conditions, the decline in oil prices and the easing of the war to some extent,” she said, adding that expectations of a possible CBRT rate cut and stronger reserves were also supporting the decline in CDS.
She cautioned that risks remained, including the possibility that U.S. sanctions on Iran could affect Türkiye, particularly given the country’s imports of Iranian natural gas.
A renewed escalation in the conflict could push oil prices higher again, while deterioration in inflation expectations or a slowdown in reserve accumulation could also limit the decline in Türkiye’s risk premium.
‘Critical signal’
Seda Yalçınkaya Özer, head of strategy and investment advisory at Yatırım Finansman, said Türkiye’s CDS move should be viewed against both global and domestic developments.
She said expectations of diplomacy involving Iran, Pakistan and Oman, along with the U.S. avoiding direct sanctions on Chinese banks, had reduced the risk premium embedded in oil prices.
“There is a general narrowing in emerging-market risk premiums globally,” Özer said, noting that the easing of tensions in the Middle East and lower commodity prices had boosted risk appetite across emerging markets rather than Türkiye alone.
She cautioned that a potential Iranian retaliation could quickly reverse current market pricing.
For Türkiye, however, oil prices below $90 a barrel are clearly positive for the current account balance, fuel prices, inflation and the CBRT’s room for monetary policy, she said.
Özer also described the CBRT’s return to weekly repo auctions after roughly six months as a “critical signal.”
Moving funding costs from around 40% overnight toward the 37% policy rate could be interpreted as a concrete step toward easing financial conditions and has brought the possibility of a rate cut in September back into focus, she said.
“The market is pricing this as confirmation that the normalization process is continuing, alongside a gradual slowdown in inflation.”
Six months into the U.S.-Iran war, Qatar is among the conflict’s biggest economic casualties, with its liquefied natural gas (LNG) exports slashed by 96%, data shows.
Saudi Arabia, the United Arab Emirates (UAE), Iraq and Kuwait have seen their oil exports hit, but by nowhere near as much.
Qatar has lost $24 billion in gas sales, which is about five months’ worth of income for the country based on 2025 data, according to calculations reported by Reuters
While neighboring Gulf exporters have managed to sneak oil secretly out of the Strait of Hormuz, Qatar has exported just 18 LNG cargoes, down from 509 in the same period last year, according to data intelligence firm ICIS. Two Qatari tankers have been attacked.
Before the war, Qatar supplied about one-fifth of the world’s daily LNG. Exports from the U.S. have offset some of that lost supply.
Still, European gas storage has fallen to a historic low for the time of year, exposing the continent to possible gas price spikes in the event of a cold winter this year.
Türkiye’s state-owned Halkbank raised an additional $1.1 billion from international markets following the dismissal of a U.S. criminal case against the lender, the bank announced Tuesday.
In a statement submitted to Türkiye’s Public Disclosure Platform (KAP), Halkbank said the conclusion of the case in its favor had improved its access to overseas funding.
The bank noted that it had raised $3.9 billion in external funding before the case was resolved through instruments, including Additional Tier 1 (AT1) subordinated debt and bilateral loan agreements.
The additional financing brought the amount of external funding raised before and after the dismissal to $5 billion.
Halkbank also reported a rapid increase in the number of counterparties following the conclusion of the legal proceedings.
It said it established a $5 billion Global Medium-Term Note (GMTN) program on July 17 after receiving approval from its board of directors.
The programs allow financial institutions to issue multiple debt instruments in international markets under a single framework, providing flexibility over maturities, currencies and issuance timing.
Halkbank said feedback gathered during a non-deal roadshow with fixed-income investors indicated strong interest in its planned issuances.
The lender added that it would continue to strengthen its presence in international markets and assess alternative funding channels to support a sustainable funding structure.
Fifty-four provinces in Türkiye recorded year-over-year increases in exports in the first seven months of the year, while 22 surpassed $1 billion (TL 48.10 billion) in shipments, the Trade Ministry said Tuesday.
Türkiye’s total exports rose 2.9% on an annual basis to $25.6 billion in what marked the highest-ever July shipments. In the January-July period, exports grew 3.4% to $161.6 billion.
Istanbul remained the country’s largest exporting province last month, with exports of about $5.9 billion, although its shipments fell 0.6% from a year earlier, the data showed.
The northwestern Kocaeli ranked second with almost $3.4 billion, down 1%, followed by the western Izmir with nearly $2.1 billion, up 6.9%.
Precious and semi-precious stones were Istanbul’s largest export category, generating $968.3 million. Knitted clothing and accessories followed with $517.2 million, while boilers and machinery accounted for $498 million.
Istanbul’s largest export market was the U.S., with shipments worth $406.7 million, followed by Germany at $352.6 million and the United Arab Emirates (UAE) at $344 million.
In Kocaeli, motor vehicles were the leading export category at $1.2 billion, followed by mineral fuels and oils at $335.9 million and electrical machinery and equipment at $334.8 million.
Germany was Kocaeli’s largest export market at $339.1 million, followed by the U.K. with $334.1 million and the U.S. with $169.6 million.
Mineral fuels and oils led Izmir’s exports at $351.3 million, followed by motor vehicles at $233.8 million and boilers and machinery at $212.5 million.
Germany was Izmir’s largest export destination at $191.9 million, followed by the U.S. at $128.5 million and Niger at $119.7 million.
Southern Mersin posted the largest increase in export value among provinces last month, with exports rising by $194 million from a year earlier.
Izmir ranked second with a $135 million increase, followed by southern Antalya with a $129 million rise.
Canada announced retaliatory tariffs of 15% to 50% on a range of U.S. goods Tuesday, escalating a trade dispute between the longtime North American allies.
Ottawa’s retaliation will take effect Sept. 8, a timeframe earlier outlined by Prime Minister Mark Carney after U.S. President Donald Trump’s 50% duties came into place Saturday.
Canadian officials said Tuesday that the retaliatory tariffs will match U.S. levels, with impacts on industries including steel, dairy and electronics.
Canada’s government also announced a $5.4 billion (CA$7.5 billion) aid package for impacted firms and workers.
“This is an unprecedented challenge imposed on Canada. But Canada will meet the moment,” Finance Minister Francois-Philippe Champagne said.
“I think what Canadians can see this morning is that we stand united,” he added. “Canada must respond and today we are, in a proportionate, targeted and strategic way.”
Industry Minister Melanie Joly echoed Champagne’s call for Canadians to support local businesses, while vowing to work with new allies and trading partners.
“We cannot wait for Washington to decide our future,” she said.
The steep U.S. tariffs hit about $20 billion in Canadian goods – about 5.5% of its exports to the United States – after trade negotiations collapsed at the eleventh hour.
Under Canada’s planned response, US steel and aluminum products previously subject to a 24% duty will soon face 50% tariffs.
Goods facing 25% tariffs will include appliances, dairy products like cheese, as well as certain steel and aluminum derivative products.
A small category will see a 15% duty, including electric equipment and tools.
Overall, these form about 7.3% of Canada’s imports from the United States.
But analysts warn of tit-for-tat escalation.
Already on Monday, Trump pledged to double tariffs on Canadian autos starting next year, up to 50% from the current 25% for non-U.S. content.
Ontario Premier Doug Ford criticized Trump’s threat on autos, saying he could “kiss my ass” and threatening an electricity export surcharge.
Trump lashed out at Ford, warning of “far worse” consequences. He also referred to Carney as a “governor,” re-upping his inflammatory push for Canada to become the 51st U.S. state.
Highlighting the animosity, Trump said Tuesday he was considering renaming Lake Ontario as “Lake America,” as he did last year with the Gulf of Mexico, which he ordered to be called the “Gulf of America.”
Trump’s latest tariffs do not exempt products covered by the U.S.-Mexico-Canada free trade agreement (USMCA). They raise the U.S. effective tariff rate on Canadian exports to 6.9% from 5.1%, Oxford Economics estimates.
Tariffs on plastics, electrical machinery, and wood and paper products contribute most to the increase.
“Manufacturers in Quebec, New Brunswick, and Ontario will be affected the most,” Oxford Economics said.
Over the weekend, Carney said U.S. negotiators sought restrictions on Canadian trade deals with other countries at the last minute.
U.S. officials made unacceptable “threats” to the French language and “Quebec culture” too, he added, referring to eastern Canada’s French-speaking province.
Trump pushed back Tuesday, saying on Truth Social that he would “never interfere with Canadians speaking French” and accusing Carney of lying to “gain political support.”
The United States is Canada’s biggest trading partner, with Canadian exports to its neighbor representing 70% of its overall total.
Canada is the second biggest U.S. trading partner in goods this year, behind Mexico.
Polling released Sunday by the Angus Reid Institute showed Canadians broadly support Carney’s move to walk away from talks, but some fear economic repercussions.
The White House had alleged “discriminatory treatment” by Canada against U.S. alcohol, automobile and dairy products in rolling out new tariffs.
Trump delayed their implementation, but both sides failed to reach an agreement after hours of talks.
Beyond tariffs, Washington and Ottawa also have to agree on revisions to the USMCA, which Trump declined to renew in its current form.
Iran pledged Tuesday to retaliate against expanded U.S. sanctions intended to isolate its economy, expressing confidence that key trading partners would withstand pressure from Washington.
Almost six months into a conflict the U.S. has struggled to resolve, Treasury Secretary Scott Bessent unveiled the measures Monday but stopped short of the most punishing sanctions.
While he said countries that continued trading with Iran risked being forced out of the dollar-based financial system, he declined to give a timeline or identify which may be targeted, saying he would give them time to comply with the new directive.
“Why would I want to blow up the global financial system?” he said when asked why the measures had not gone further.
The Treasury Department did announce new sanctions on 60 individuals, entities and vessels, but the list did not feature any of the Chinese financial institutions suspected of facilitating Iran’s oil trade.
“We want to make clear here today that no one is above the reach of U.S. sanctions,” Bessent said in response to a question about Chinese banks.
China has been the biggest buyer of Iranian oil for several years, although the U.S. blockade of Iran’s ports has cut Iranian oil flows to China since Washington renewed it in mid-July.
Experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks next month between President Donald Trump and Chinese President Xi Jinping, with any curbs on China’s exports of critical minerals especially sensitive.
China said Tuesday that its cooperation with Iran is conducted within the framework of international law and should not be interfered with or disrupted.
Oil prices fell for a second day as traders brushed off the impact of the sanctions, although market participants remained wary of Iran’s continued ability to disrupt shipping.
Oil tanker struck near Strait of Hormuz
An oil tanker was struck Tuesday by an unidentified projectile and disabled about 9 nautical miles (17 kilometers) northeast of Oman’s Ash Shishah, which lies at the entrance to the Strait of Hormuz, the United Kingdom Maritime Trade Operations said.
Before news of the latest sanctions, Iran threatened both a possible military response and further reduction in oil exports from the Gulf in retaliation for any U.S. economic measures.
After they were unveiled, Iranian Economy Minister Ali Madanizadeh said that Iran was prepared.
“Our defense is no longer so defensive; the enemies should wait for an attack,” he told state television. Neither China nor Russia had “accepted” the U.S. measures, he added, predicting that other countries would resist them.
Brig. Gen. Hossein Mohebbi, a spokesperson for Iran’s Islamic Revolutionary Guard Corps, vowed heavy blows to U.S. vital interests and energy chokepoints if Iran’s infrastructure is threatened, Press TV reported.
Iran and the United States signed an interim deal in June aimed at ending the war that began with U.S. and Israeli attacks on Iran in February, but it quickly faltered and Iran resumed attacks which have blocked most energy exports from the Gulf.
Mediator Pakistan made “significant progress” in the latest talks with Tehran that focused on preventing further escalation and the reopening of the Strait of Hormuz, the Pakistani military said Tuesday.
“We had a very constructive exchange,” Pakistani Interior Minister Mohsin Naqvi, who accompanied army chief Asim Munir to Tehran, said on the social media platform X.
An official at the Iranian president’s office, Mehdi Tabatabaei, said on X that Munir’s visit to Iran “yielded highly valuable diplomatic achievements, the results of which will soon be revealed.”
Little sign of diplomatic solution
Despite no major strikes by either side in weeks, there is little sign of a diplomatic solution.
Iran has spent decades under layers of U.S. and international sanctions that have battered its economy but have not deterred its leadership.
U.S. public approval of the war fell to its lowest level since the conflict’s early days, with Trump’s popularity at a record low ahead of congressional elections in November, a Reuters/Ipsos poll that closed Monday showed.
Oil transits through the Strait of Hormuz were at 5 million barrels per day Monday, provisional tracking from shiptracker Vortexa showed, down from more than 20 million per day before the war or about one of every five barrels consumed worldwide.
Thousands of people have died in the conflict, most of them in Iran and Lebanon, while much of Iran’s conventional military capacity has been degraded, its economy is struggling and then-Supreme Leader Ayatollah Ali Khamenei was killed.
But Iran is still able to attack Gulf neighbors and threaten oil tankers. The exact state of its nuclear program, which the U.S. and Israel aim to wipe out, remains unknown.
-
Politics2 days agoNetanyahu clings to anti-Türkiye campaign amid Likud’s decline
-
Politics3 days ago8 nations reject Israel’s E1 settlement plan, urge sanctions
-
Economy2 days agoTurkish households shift toward gold as real estate appeal declines
-
Sports2 days agoCeferin dismisses FIFA bid as Infantino woos poorer associations
-
Sports2 days agoGauff defends Cincinnati crown, Fils lifts 1st ATP Masters 1000 title
-
Sports3 days agoReal’s 2nd Mourinho era starts with last-gasp win at Espanyol
-
Politics3 days agoTürkiye seeks Interpol red notices for Netanyahu over genocide charges
-
Politics2 days agoVerdict likely due in cases of corruption linked to CHP mayors of Türkiye