Turkey's business confidence index hits 3-year high of 112.4 in June

Turkey's business confidence index hits 3-year high of 112.4 in June
By bne IntelliNews June 23, 2017

Turkey’s business confidence index rose 3% m/m to 112.4 in June, the highest level recorded since May 2014’s 113.5, central bank data showed on June 23.

The real sector confidence index was at its lowest this year in January, mainly due to a significant depreciation of the Turkish lira plus political uncertainties amid terror attacks and the heated debate over constitutional amendments for a shift to an executive presidency. The government introduced a set of stimulus measures during the first quarter in the build-up to the April 16 referendum on the introduction of the powerful presidency.

Seven of the business sentiment survey’s eight sub-indices improved in June compared to May’s readings. The sub-index for the general business situation showed the highest increase of 6.3% m/m while the indices measuring current orders, employment for the next three months, capital investments, the current level of stocks and export orders for the next three months also showed improvements compared to April.

Meanwhile, the sub-index for output volume in the coming three months showed the only recoreded monthly decline in June, amounting to 0.26%.

Leading indicators hint at a strengthening economic recovery in the second quarter, the central bank said on June 22 in the minutes of its latest Monetary Policy Committee (MPC) meeting. April’s industrial production and May PMI data signaled a more robust increase for the second quarter than in the previous quarter.

Not only the manufacturing industry, but also services, retail trade and construction have seen strengthening activity recently. Accordingly, the economic recovery appears to be widespread across sectors, the central bank also said on June 22.

The tense political atmosphere stemming from the ongoing state of emergency, extended in mid-April for another three months, will continue to impair business and consumer confidence, holding back investment and consumption and keeping growth low by historical standards, Moody’s Investors Service warned in April.

Data

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