The economic confidence index fell 5.4% m/m to 78.7 in June, the index’s lowest level on record, data of the statistics office TUIK showed on June 29.
The index that rose in the previous two months declined as overall business confidence, and service sector confidence deteriorated in June.
Consumer confidence increased 3.4% m/m in June after falling 1.6% m/m in the previous month, TUIK said, adding that the increase in retail industry confidence was 0.6% m/m vs 1.5% m/m rise in May. The index measuring business confidence in the construction industry rose 1.6% m/m in June after rising 2.9% m/m in the previous month.
The markets are anxiously waiting for the formation of a new government amid the June 7 elections that resulted into a hung parliament. The political parties will launch formal coalition talks after newly elected deputies elect the new speaker of parliament this week. Turkey’s business leaders urge for the quick formation of a coalition government because prolonged political uncertainty or a snap poll will hurt consumer and business sentiment.
If no coalition is formed and Turkey heads to the polls again, political uncertainty would remain heightened until the end of the year, which could potentially hamper growth if business investments are postponed, said Standard & Poor’s, the rating agency, in a note on June 18.
| Turkey's Confidence Indices | |||||||
| Dec | Jan | Feb | Mar | Apr | May | Jun | |
| Economic | 93.6 | 93.2 | 91.4 | 79.6 | 81.8 | 83.1 | 78.7 |
| Consumer | 67.7 | 67.7 | 68.1 | 64.4 | 65.4 | 64.3 | 66.4 |
| Real Sector | 108.3 | 106.4 | 104.2 | 101.1 | 102.6 | 103.9 | 101.5 |
| Services | 98.8 | 100.8 | 101.6 | 100.9 | 100.3 | 100.4 | 99.0 |
| Retail | 107.2 | 104.4 | 103.6 | 103.2 | 102.0 | 103.5 | 104.1 |
| Construction | 83.4 | 82.5 | 84.9 | 83.6 | 81.1 | 83.4 | 84.7 |
| source: tuik | |||||||
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