Turkey Business Confidence August 2016


Turkey: Political uncertainty weighs on business confidence in August

August 25, 2016

The Real Sector Confidence Index published by the Central Bank decreased from July’s 108.0 to 103.6 in August. Business sentiment fell to a seven-month low as July’s failed coup and the subsequent purge fueled uncertainty among businesses. Despite August’s drop, the index is above the 100-threshold and indicates an optimistic outlook for business conditions.

August’s result showed that businesses are becoming more pessimistic as nearly all the categories that comprise the index lost ground over July’s reading. The total amount of orders in the previous three months declined to a 17-month low, while the stocks of finished goods fell to the lowest level since June 2015. The general business situation also recorded a sizeable drop in August. On the upside, both export orders for the next three months and fixed investment expectations expanded.

FocusEconomics Consensus Forecast panelists see fixed investment expanding 1.3% in 2016, which is down 1.4 percentage points compared to last month’s estimate. In 2017, panelists expect investment growth of 2.7%.

Author: Ricard Torné, Lead Economist

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Turkey Business Confidence Chart

Turkey Business Confidence August 2016 1

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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