Turkey: Business confidence recovers slightly in January
The Real Sector Confidence Index published by the Central Bank increased from 91.5 in December to 93.0 in January. As a result, the index moved closer to the 100-point threshold that separates optimism from pessimism among firms.
The rise came on the back of greater optimism regarding output, employment and exports over the next three months. However, firms grew gloomier about current orders and the general business situation.
In terms of prices, firms’ inflation expectations for the next 12 months moderated for the third straight month, from 24.9% in December to 23.4% in January. This downgrade was likely driven by tighter monetary policy, weak economic momentum, and lower oil prices. A further fall in inflation expectations going forward—which will feed through to price-setting behavior—will be key to returning inflation to more manageable levels.