Turkey: Business confidence recovers somewhat in November but stays pessimistic

The Real Sector Confidence Index published by the Central Bank picked up from 87.6 in October to 92.8 in November, ending a run of seven consecutive monthly declines. However, the index remained below the 100-point threshold that separates optimism from pessimism among firms.

The improvement came on the back of rising confidence regarding total current orders; and output, employment and export orders over the next three months. Firms also rated the general business situation far more positively, likely thanks to a period of calm in financial markets.

In terms of prices, firms’ inflation expectations for the next 12 months finally levelled off—albeit at the elevated level of 28.1%—after rising almost uninterruptedly since the start of 2018. Despite this, elevated inflation expectations continue to present a major challenge for the Central Bank in its efforts to rein in inflation.

Turkey Fixed Investment Forecast

FocusEconomics Consensus Forecast panelists see fixed investment contracting 5.8% next year, before expanding 3.4% in 2020.