Confidence in the Turkish economy has fallen to its lowest point since April 2009, a survey by the country’s national statistics office TUIK showed on January 30.
The survey, however, did not reflect the impact of the double whammy of downgrades issued on January 27 by Fitch Ratings and Standard & Poor’s rating agencies.
The first market reaction to the downgrades appeared rather muted. The lira strengthened 0.18% to trade at 3.8632 per dollar while the main stock exchange, the BIST-100, was up 0.94% as of mid-morning Istanbul time. Investors had been pricing in the widely-anticipated Fitch downgrade, which explains the markets’ response.
Investors will continue to keep a close eye on the steps the country’s central bank is taking to support the currency and the run-up to April’s planned referendum on a constitutional package that lays the ground for a strong executive presidential system.
The lira has fallen more than 9% against the greenback since the start of the year.
The headline economic sentiment index slipped 3.9% m/m to 85.7 points in the month on weaker business confidence, the survey showed.
The business confidence index was down 3% m/m, sentiment in the services sector fell 6.2%, and confidence in the retail industry declined by 0.2% m/m in January. TUIK also reported that construction sector confidence, another major component of the economic confidence index, was down 1.7% m/m in the month.
Consumer confidence, however, increased by 5.6% m/m in January, according to the survey.
|Turkey's Confidence Indices|
Turkey will not extradite any terror suspects to the US if Washington continues to refuse to hand over Fethullah Gulen, President Recep Tayyip Erdogan said on January 11. Ankara blames the ... more
The Turkish central bank reported on December 7 that its gross forex reserves last week experienced a record drop, declining to $89.85bn on December 1 from $96.35bn a week earlier. ... more
EU governments have agreed with the European Parliament to withdraw €105mn that would have gone to help finance political ... more