The economic confidence index shrank 17% m/m in September to 70.9, the historically lowest level, after declining 1.3% m/m in the previous month, data of the statistics office TUIK showed on September 29.

The economic confidence index is a composite index gauging consumer and businesses sentiment surveys to provide composite assessments on the economic outlook and their expectations. Turkey is headed towards fresh parliamentary elections, which according to most of the polls –except two pro-government ones- would produce yet another hung parliament, at a time the clashes between the security forces and PKK intensify. A dangerous combination of political uncertainty and the flare up in violence is likely to continue to hurt consumer and business confidence. Confidence indices have been recently suggesting deterioration in the expectations of the economic players, however, the latest data indicated the seriousness of the situation and raised concerns regarding the growth performance in the remainder of the year. Consumer confidence indicators point to a deceleration in the private consumption for the second half, the Central Bank of Turkey said on September 23 in a presentation to economists.

The real sector confidence index in September fell below to 100-mark line, which separates optimistic and pessimistic outlook, for the first time since December 2012, data of the central bank showed on September 28. Business sentiment in construction, retail and service, deteriorated further in September after the confidence in all three industries declined in August, the TUIK announced on September 22 the results of its monthly confidence survey. Consumer confidence declined by 6.1% m/m to 58.5 in September, its lowest in more than six years, a survey carried out jointly by the statistics office TUIK and central bank showed on September 21.