Turkey: Business confidence records worst reading since December 2021 but remains in positive territory in June
Business confidence came in at 106.4 in June, down from May’s 109.4. June’s result marked the worst performance since December 2021. However, the index remained above the 100-threshold, indicating sustained optimism among businesses.
The fall came on the back of a deterioration in firms’ assessments of current order books, while firms’ sentiment regarding the general business situation at present weakened. Further, business’ views regarding expected output and export orders in the next three months and the total amount of orders in the past three months as less favorably.
Regarding the general environment as it related to investment, analysts at the EIU added:
“Turkey’s ability to attract and retain foreign investment will depend greatly on how it navigates through acute political and economic challenges from within and beyond its borders. […] Popular perception that the government is mismanaging the economy and politics has led to increasing volatility in capital flows, a dramatic weakening of the lira and rising inflation. Other long-standing deterrents to foreign investment include regulatory uncertainty, a slow and unpredictable judicial system, weak (but improving) intellectual-property protections, and unfair competition from smuggled goods and the informal sector.”