Turkey Business Confidence July 2019


Turkey: Business sentiment drops in July

July 25, 2019

Business confidence dropped markedly from 102.5 in June to 98.3 in July, opening the third quarter on a sour note. The deterioration in sentiment came on the back of worsening outlooks for production and overall order books—due to both weakening domestic and export new orders—over the past three months and currently, as well as easing confidence regarding export orders in the next three months. However, a more upbeat view on production and employment in the three months ahead cushioned the fall in sentiment somewhat.

Meanwhile, inflation expectations eased for the third month running in July, with firms expecting inflation to moderate from 22.7% to 21.6%. Inflation expectations remained elevated, however, and are likely influenced by the ongoing weakness in the currency—on 24 July, the lira depreciated 7.4% against the US dollar in year-to-date terms. However, in recent weeks the lira has shown resilience amid rising geopolitical tensions.

Last month, FocusEconomics Consensus Forecast panelists expected fixed investment to contract 9.1% in 2019, before expanding 2.5% in 2020. A new FocusEconomics Consensus Forecast report will be published on 30 July.

Author:, Economist

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Turkey Business Confidence Chart

Turkey Business Confidence July 2019

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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