Turkey Business Confidence June 2016


Turkey: Business confidence declines again in June

June 24, 2016

While the market reaction following Prime Minister Ahmet Davutoglu’s resignation was relatively mute, President Recep Tayyip Erdogan’s intention to move forward with his plan to establish a presidential system in Turkey is weighing on businesses’ sentiment. The Real Sector Confidence Index published by the Central Bank fell for the second consecutive month in June, declining from 109.8 in May to 106.8. Nevertheless, business confidence remains above the 100-threshold and indicates an optimistic outlook for business conditions.

June’s result showed that businesses are becoming less optimistic as most of the categories that comprise the index lost ground over May’s tally. The expected volume of output in the coming three months, job prospects in three months and export orders in the next three-month period all hit a five-month low in June. Moreover, the general business situation dipped further below the 100-threshold. On the other hand, stocks of finished goods climbed to a five-month high.

FocusEconomics Consensus Forecast panelists see fixed investment registering a 3.1% expansion in 2016, which is up 0.1 percentage points compared to last month’s estimate. In 2017, panelists expect investment growth of 3.9%.

Author: Ricard Torné, Lead Economist

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Turkey Business Confidence Chart

Turkey Business Confidence June 2016

Note: Real Sector Confidence Index. Values above 100 indicate an optimistic outlook while values below 100 indicate a pessimistic outlook.
Source: Central Bank of the Republic of Turkey (CBRT).

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