Economy
Turkish central bank says April inflation driven by energy, food
In last week’s policy meeting, the Turkish central bank suggested that inflation in April is being driven mainly by rising energy and food prices, while the underlying trend is expected to increase slightly.
The summary of the bank’s policy-setting meeting at which it kept interest rates steady was shared on Thursday.
Warning of “uncertainties” amid geopolitical developments and elevated energy prices in March and April, the Central Bank of the Republic of Türkiye (CBRT) said, “Leading indicators suggest that in April, consumer prices will be driven by energy and food prices, whereas the underlying trend will increase slightly.”
“Domestic energy prices posted a substantial rise on account of price increases in natural gas and electricity for households,” it added.
Official inflation data is due to be released next week. The annual inflation rate in March was at 30.87%, compared to 31.53% in February.
“Brent crude oil prices generally trended upward in both March and April,” the bank noted.
On Thursday, the prices reached the highest since the war between the U.S., Israel, and Iran started two months ago, touching briefly $126 before easing.
Among others, the CBRT also pointed out that risks related to the Strait of Hormuz, coupled with the search for alternative routes, “led to longer lead times, and security risks caused higher insurance premiums and freight rates in March. “
Moreover, it said that inflation expectations and pricing behavior continue to pose risks to the disinflation process, as it cited that inflation expectations rose in April.
“Given the size of price volatility and supply constraints in commodities, the uncertainty over the inflation outlook has substantially increased. The effects of these developments and domestic energy prices on the inflation outlook through the cost channel and economic activity are being closely monitored,” it said.
The central bank also said it would tighten its policy stance “if there is a significant and persistent deterioration in the inflation outlook.”
“In case of a significant and persistent deterioration in the inflation outlook, which can also be driven by the recent developments, the monetary policy stance will be tightened. The committee reiterated that it remains highly attentive to upside risks on inflation.”
China’s exports once again topped expectations with official data on Tuesday indicating that the continued global AI boom helped boost demand for chips and computing equipment from the world’s second-largest economy in June.
The figures came despite global trade disruptions caused by the U.S.-Israeli war on Iran, providing a much-needed boost to China, which is increasingly reliant on exports to fuel growth.
Overseas shipments rose 27.0% year-over-year, beating the 19.0% forecast in a Bloomberg survey of economists.
The General Administration of Customs data also showed imports soared 36.0%, easily outstripping the 26.1% estimated in the Bloomberg survey, and well up from the 27.4% jump seen in May.
“Trade values took another big leg up in June. This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom,” Julian Evans-Pritchard, of Capital Economics, said in a note.
The value of China’s semiconductor exports more than doubled from the same month a year ago and rose $2.7 billion from May, while data processing equipment shipments also rose 53.1% from a year earlier.
But that expansion was “entirely a price story caused by the ongoing shortage of memory chips,” Evans-Pritchard said, noting that the volume of semiconductor exports actually fell year-over-year in June.
“Surging semiconductor prices are playing a key role in pushing up import values,” rather than domestic consumption surging, he said.
Automobile exports, meanwhile, jumped 69.6% year-over-year, reflecting strong demand for Chinese electric vehicles, he added.
Shipments to the U.S. rose 13.9% to $43.5 billion, putting China’s trade surplus with its superpower rival at $28.9 billion.
Ties between Washington and Beijing have stabilized since U.S. President Donald Trump visited Beijing in May, but the persistent trade imbalance remains a source of friction between the two.
China is also locked in a simmering trade feud with the European Union, with which it recorded a trade surplus of $32.9 billion in June, a rise from $30.7 billion in May.
June’s data “showcases the competitiveness and resilience of China’s manufacturing sector,” Zhang Zhiwei, of Pinpoint Asset Management, wrote in a note.
“It also puts further pressure on the trade tension between China and its trading partners, Europe in particular,” he said.
The volume of rare earths exports was down 34% last month and 6.4% on an annual basis in the first six months of the year as Beijing tightened restrictions on the critical elements.
China accounts for around two-thirds of the total global production of the minerals, which are used to make everything from smartphones to missiles, and has wielded its dominance in the sector as a weapon in trade wars with the West.
China’s overall trade surplus hit $126 billion last month, up from $105 billion in May, a gap that is worrying for European economies and other governments.
The U.S. central bank should stand ready to hike interest rates in the near-term if inflation remains above target, the bank’s top official said Monday.
“When inflation is well above its target and the labor market is near full employment and stable, any serious policy rule calls for raising the policy rate to bring down inflation,” a member of the Federal Reserve (Fed) Board of Governors, Christopher Waller, said at an address in Rome.
Waller said Tuesday’s consumer price index (CPI) report will be important.
“If we get another hot reading on core inflation this week, then the (Fed) will need to consider tightening monetary policy in the near term,” he said.
The stance is in line with remarks from newly installed Fed Chair Kevin Warsh, who vowed at his first press conference as head that the central bank would achieve price stability.
Waller noted that the 12-month personal consumption expenditures rate in May stood at 3.4%, well above the Fed’s 2% target.
The Fed “has to be ready to tighten monetary policy to prevent a repeat of the 2021-to-2022 inflation episode,” Waller said.
“Sternly staring at inflation until it melts before our withering gaze is not an option.”
Waller said he was aware of the need to avoid “overtightening” and risking a recession, but that dynamics in the labor market and with inflation point policymakers in a clear direction.
“Unless I see evidence of a significantly weakening labor market, my focus will be on inflation,” Waller said.
The European Union will move to limit young children’s access to social media across the 27-member bloc, European Commission President Ursula von der Leyen said on Monday, in what would be the biggest such effort to date to guard against online dangers.
Von der Leyen’s remarks came as a special EU panel looking into the challenge recommended forbidding access for those under 13 until tech companies can prove their platforms are safe.
Growing awareness of the dangers social media poses for young, developing brains has shown up in a wave of new restrictions globally. Australia, the U.K., Türkiye, Indonesia and others have passed bans on kids under 16 or 15 from using platforms like TikTok, YouTube and Instagram.
Laying out a list of her concerns about the use of social media by kids, von der Leyen, a doctor by training, said that children under 3 should have no exposure to screens at all.
“I believe we need to consider phased and gradual access for different age ranges because childhood won’t wait and once it’s gone, we can never give it back,” von der Leyen told reporters.
“Just as we don’t give our children keys to the car before they have their license, or we do not let them buy alcohol until they are legally allowed. We need to set the age at which they can, the children can, legally access social media,” she said.
“This is not about whether children can access social media. It is about whether and when social media can access our children.”
Von der Leyen noted infinite scrolling as one of the “addictive” traits that tech companies must address.
Beyond toddlers, she did not mention any precise restrictions, but she and the European Commission, the EU’s powerful executive branch, are likely to come up with a proposal for the 27 member countries to weigh in the near future.
Von der Leyen’s policy proposals carry great influence with EU member countries.
A special panel set up to study child safety online delivered its report to the EU chief on Monday. The report said that when it comes to safety, “the burden of proof needs to be on providers, not regulators, parents and children.”
“Until they demonstrate that their services are safe by design, social media and other digital services providers should have restricted access to children under the age of 13 in the EU,” said the report, which is likely to influence von der Leyen’s thinking.
It recommended that “further precautionary age restrictions” should be considered by EU countries for children over 13.
The European Union has been mulling a social media ban since a push by EU states, including Greece and France, for limiting access, with pressure intensifying for a bloc-wide ban.
A legal proposal will come in the second half of the year, von der Leyen added, but she is expected to give an indication of what the restrictions will look like in September.
The report by co-chairs child psychiatrist Jorg Fegert and epidemiologist Maria Melchior offered a glimpse of how the EU’s proposal could look like as they recommended:
No screens at all for babies and toddlers; Supervised use of “age-appropriate social media” and devices children aged between three and 12 by parents or teachers; For those aged 13 to 18, “evolving autonomous use” of social media and other digital platforms that have “key safety features.”
Many social media and video sharing platforms including TikTok and Meta’s Facebook and Instagram are only available to children aged 13 and over.
Platforms “must prove that their services do no harm. In Europe, whoever develops a product is responsible for its safety,” von der Leyen said.
“We are convinced that Europe must introduce protective measures to ensure the safety of children and adolescents in the digital world,” Melchior said, standing next to von der Leyen.
The EU has already ramped up the pressure on social media platforms to change in recent months, telling Facebook and Instagram Friday to dismantle their “addictive” features, after a similar warning to TikTok in February.
Divided EU positions
The report did not recommend a blanket ban on digital platforms including social media, and von der Leyen did not back such a move.
What the panel found was the Australian ban faced difficulties as children found ways around the limits, forcing the EU to reconsider its approach.
Instead, it wants platforms to remove or limit features like autoplay content, infinite scroll, and push notifications.
The European Parliament in October called for a ban on social media for children under the age of 16, a position some EU lawmakers continued to back – although divisions remain over the age.
“I still believe the age should be 15, not 13. 13 is already the minimum age used by most major social media platforms today,” EU lawmaker Christel Schaldemose said in a statement after the panel’s report.
There will likely be difficult negotiations since any EU proposal will only become law after talks between the parliament and member states.
Targeting harmful design
A dilemma for the EU is how to avoid different age limits across 27 countries. For example, Spain wants to ban under-16s accessing social networks, while France proposes prohibiting children aged 15 and under.
And then there are EU nations such as Estonia that oppose a ban.
Von der Leyen said the European Commission, the EU’s executive arm, would “have a very careful look” at the national proposals.
Brussels will “integrate” their work, she said, and then prepare its own proposal to “harmonize the approach and to find a common solution.”
The EU already has a bolstered armory to rein in Big Tech and protect users online, and the commission has said more rules are on the way.
EU consumer protection chief Michael McGrath vowed a new law, expected later this year, will give children stronger protection against addictive design.
Volkswagen may need to eliminate about 50,000 additional jobs to match the competitiveness of its rivals, its CEO told employees in an internal memo, effectively confirming for the first time that the carmaker is considering cuts of up to 100,000 positions.
Oliver Blume is battling to streamline Europe’s biggest carmaker, whose profits have slumped as its faces billions of euros in tariff costs, stiff competition in China and pressure on its German manufacturing network to become more efficient.
After already agreeing 50,000 job cuts across the group, including its Porsche and Audi subsidiaries, the company must work on reducing costs further, having calculated a cost disadvantage versus comparable companies of 20%, Blume said in the memo seen by Reuters.
This means a “theoretical deduction” of another 50,000 jobs worldwide, the memo said.
“We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible,” Blume said in the document.
Staff costs are determined not only by the number of employees but also by labor costs, he added. “We must also pull this lever,” he said, indicating that the exact scale of the job cuts has not yet been finalized.
The company had previously declined to comment on reports it was considering up to 100,000 job losses.
The memo follows angry calls from workers for management to explain its restructuring plans, which Blume presented to the company’s supervisory board on Thursday.
Nationwide protests were held by trade union IG Metall on Thursday, while the company’s works council also outlined its fury over the weekend.
Sources familiar with the matter said labor representatives on the committee blocked the proposals, which were said to include job cuts and the possible closure of four factories.
“As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau and Neckarsulm in the 2030s,” Blume said in the memo.
He said he preferred “intelligent solutions” to closures, having previously pointed to the defense industry or the production of Chinese Volkswagen models in Europe as options for underutilized factories.
Tanker traffic through the Strait of Hormuz fell in the past day to a two-month low, according to shipping data Monday, amid heightened safety worries after renewed strikes between the U.S. and Iran and attacks on ships.
Shipping industry sources said vessels were increasingly switching off their public AIS tracking transponders, making it difficult to determine the full number of ships crossing the waterway.
Based on available data, oil and gas tanker traffic fell to its lowest level since May 25, according to analysis from Kpler.
“Should the renewed escalation in the strait lead to another prolonged closure of Hormuz, the world will find itself in a much tougher spot,” ship broker Gibson said in a report.
“With global inventories rapidly depleted in recent months, this is a recipe for much tighter supply, higher prices and significant downside risk for tanker markets.”
The Sea Faith oil products tanker was among the few visible vessels sailing toward the entrance to the Strait of Hormuz near the Iranian side of the waterway, with a destination of Sohar, according to LSEG and MarineTraffic ship-tracking data on Monday.
Commercial traffic through the Strait of Hormuz “continued at reduced levels,” the U.S. Navy-led Joint Maritime Information Center (JMIC) said in an advisory on Sunday.
“Traffic patterns continued to reflect operator caution following recent attacks.”
At least three pairs of tankers were involved in ship-to-ship transfers outside of Hormuz off Oman’s coast in the Gulf of Oman, according to the latest satellite imagery from July 11 reviewed by Reuters.
Ship-to-ship (STS) transfers typically involve the transfer of oil from one vessel to another. Since the conflict began on Feb. 28, STS transfers have enabled faster deliveries of oil onto waiting ships that do not need to sail through Hormuz.
“Some ships are slipping in and out,” one shipping official said on Monday.
“This has to be viewed as a managed conflict now similar to the Houthis in the Red Sea,” the source said, referring to the Yemeni militia, which paralyzed traffic through the Bab al Mandeb waterway for nearly two years before calling a cease-fire in 2026.
Trump, Iran differ over strait status
U.S. forces completed another wave of strikes against Iran on Sunday, hitting dozens of targets at multiple locations with precision munitions, the Central Command said.
U.S. President Donald Trump said on Sunday that the Strait of Hormuz is open to commercial traffic, although Iran declared earlier that it closed the strait after a vessel traveled on an unapproved route and was struck.
Iran’s Revolutionary Guards said on Monday that their navy stopped two ships in the Strait of Hormuz last night by shutting down their systems. They did not name the ships involved.
A container ship sustained damage from an unknown projectile which caused a fire in the engine room on Sunday, JMIC said.
Traffic slowdown
Six vessels transited the strait on Sunday, ship-tracking data from Kpler showed, the lowest number in five weeks.
Tankers that exited the strait included the Very Large Crude Carrier Humanity, laden with 2 million barrels of Iranian oil, and another tanker, Capetan Andreas, carrying about 500,000 barrels of Kuwaiti oil products, the data showed, while three empty tankers entered the Gulf to load oil.
Most of the tankers switched off their transponders when crossing the strait.
There were no liquefied natural gas tankers that entered the strait over the weekend that were visible on ship-tracking data.
One tanker controlled by the Abu Dhabi National Oil Co exited the strait between July 10 and July 12, Kpler data showed. The vessel was heading for Dahej port in India.
State energy company BOTAŞ on Monday started construction of a fourth storage tank at its terminal in northwestern Türkiye, a move that will increase the facility’s LNG storage capacity by nearly 60%.
The new 160,000-cubic-meter storage tank will raise the Marmaraereğlisi LNG Terminal’s total storage capacity to 415,000 cubic meters from the current 255,000 cubic meters, Energy and Natural Resources Minister Alparslan Bayraktar said.
The investment is expected to improve Türkiye’s flexibility in managing natural gas supplies by expanding its ability to store LNG delivered by ships, regasify it when needed and transport it via road tankers while maintaining it in liquid form.
Located in Tekirdağ province, the Marmaraereğlisi LNG Terminal plays a strategic role during periods of high natural gas demand, particularly in winter months, with a daily regasification capacity of 37 million cubic meters.
The terminal can accommodate conventional LNG carriers as well as large-capacity Q-Flex and Q-Max vessels, which are among the world’s largest LNG carriers.
Around 65 LNG vessels dock at the facility annually, with the terminal meeting approximately 15% of Türkiye’s annual natural gas demand.
In addition to LNG storage and regasification operations, the facility carries out road tanker loading, fuel supply and reload operations.
Strengthening resilience against energy shocks
Bayraktar said the terminal’s ability to source gas from multiple markets, combined with its storage capacity and regasification infrastructure, makes it a key component of Türkiye’s energy security strategy.
The minister noted that fluctuations in global energy markets have demonstrated the importance of having strong infrastructure.
Bayraktar said the new investment will “strengthen our natural gas infrastructure” and will “increase our resilience against crises.”
Türkiye currently has five LNG entry points, including two LNG terminals and three floating storage and regasification units (FSRUs).
Alongside the Marmaraereğlisi LNG Terminal, BOTAŞ operates the Dörtyol and Saros FSRU facilities.
As part of Türkiye’s National Energy and Mining Policy, LNG regasification capacity has increased nearly fivefold since 2016, rising from 34 million cubic meters per day to around 161 million cubic meters per day.
The government aims to raise total LNG regasification capacity to 200 million cubic meters per day with the addition of two new FSRU facilities.
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