Turkey’s Financial Services Confidence Index Falls Sharply in May

Turkey’s Financial Services Confidence Index (FHGE) declined by 9.2 points in May 2025, settling at 168.5, according to data released by the Central Bank of the Republic of Turkey (CBRT).

The CBRT attributed the decline to weakening across all major subcomponents of the index. Specifically, expectations for demand in the next three months, current business conditions, and actual demand over the past three months all showed notable deterioration compared to April.

Confidence Weakened Across Key Sub-Indicators

The central bank stated:

“Compared to the previous month, fewer participants reported improvements in their business situation over the past three months. Expectations for increased demand in the upcoming three months also weakened, alongside a softening in the perception of recent demand trends.”

Despite the decline in demand-related indicators, the employment outlook improved. Both the current employment level and future hiring expectations showed a strengthening trend.

Sectoral Breakdown: Diverging Trends in Finance & Insurance

Based on the NACE Rev.2 classification, sector-specific confidence levels in financial and insurance activities showed mixed results:

• Financial service activities (excluding insurance and pension funds) saw a 10.4-point drop.

• Auxiliary activities for financial and insurance services decreased by 7.6 points.

• In contrast, insurance, reinsurance, and pension funds (excluding mandatory social security) posted a strong 8.8-point gain.

Survey Based on 147 Financial Institutions

The May 2025 data is derived from responses collected from 147 financial institutions across Turkey. The Financial Services Survey aggregates and weights these responses to form the monthly confidence index, serving as a key forward-looking economic indicator for the sector.

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