Turkey policy, Polish spending, Russia’s current account

The raft of data for May out of Turkey this week underscored the precarious state of the economy prior to the shift back to orthodox economic policymaking. The central bank needs to use next week’s meeting to show that this shift remains on course and to sustain investor confidence. We expect a 500bp interest rate hike. Elsewhere, the swing in Russia’s current account into deficit in June highlights growing macro vulnerabilities. And finally, the ramp-up in Polish defence spending made the headlines at this week’s NATO summit. Taken together with higher expenditure around the upcoming election, this is putting the public debt position on an upwards path.