Turkey: Business confidence improves further in February
In spite of lingering concerns over Turkey’s ability to sustain the pace of economic growth recorded last year, business sentiment improved early this year on the back of stronger economic conditions in the near-term. The Real Sector Confidence Index published by the Central Bank rose from 108.3 in January to 110.8 in February, a four-month high. As a result, the index sits further above the 100-point threshold that separates optimism from pessimism among firms, where it has been for a year.
The increase in the headline figure reflected a more positive assessment of the economy’s current and future situation. Firms’ view on current order logs were markedly more upbeat than in the previous month, crossing the 100-point mark for the first time since last July in February. Businesses were also more optimistic regarding both domestic and foreign demand in the next three months, which likely fed into improved expectations concerning their output levels.
In addition, companies were more upbeat about hiring, while their assessment of average unit cost and selling prices improved from January. Importantly, the differential between firms that expected higher input prices and those that expected lower input prices narrowed to the lowest in four months.