Türkiye’s Economic Confidence Edges Up in May as Consumer Sentiment Improves

Türkiye’s economic confidence index, a key indicator reflecting the general sentiment in the economy, rose slightly in May 2024, moving from 96.6 to 96.7. Though modest at 0.05%, the increase suggests a cautious optimism persists among economic actors.

Consumer Confidence Sees Modest Recovery

One of the more notable improvements came from the consumer confidence index, which climbed 1.1% to 84.8. This rise signals gradual improvement in household expectations about the future of the economy, hinting at a slight rebound in consumer sentiment after months of inflation-driven strain.

Mixed Trends Across Sectoral Confidence Indices

However, not all sectors reflected the same optimism. The real sector confidence index, representing the manufacturing industry, dropped by 2.2%, falling to 98.6. This decline underscores the ongoing cautious outlook in industrial production, reflecting uncertainties in domestic demand and export conditions.

Meanwhile, confidence improved across service-driven sectors:

• The services sector index increased by 0.9%, reaching 110.5.

• The retail trade sector index rose 0.6%, settling at 111.2.

• The construction sector index recorded a notable 3.9% jump, climbing to 88.4, indicating a potential uptick in building activity and infrastructure confidence.

A Mixed Picture: Cautious Optimism Amid Uneven Recovery

Overall, May’s data reflects a slightly improved economic outlook, largely driven by recovering consumer sentiment and services-related sectors. However, the decline in industrial confidence points to the persistence of tempered expectations, especially within manufacturing and export-dependent industries.

The economic sentiment landscape in Türkiye continues to evolve unevenly, shaped by inflation dynamics, interest rate policies, and sector-specific challenges.