Turkey’s economic confidence index decreased for the second consecutive month in March, the country’s statistical authority announced Wednesday. The headline number is now at a 10 month low, and is expected to decline. Turkey suffers from accelerating CPI, as well as chronic unemployment in excess of 22%.
The figure fell 2.5% month-on-month to 95.7 in March, the Turkish Statistical Institute (Turkstat) said in a statement.
All sub-indices except for consumer confidence deteriorated in the month, with the services confidence posting the largest decline.
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The services confidence index dove 6.2% from the previous month to 113 in March, while retail trade slid 3.1% to 116 in the same period.
The sub-indices for the real sector and construction decreased by 1.6% and 2% to 108.2 and 81, respectively.
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On the other hand, the consumer confidence index increased by 1.9%, reaching 72.5 in March.
A rating above 100 indicates an optimistic outlook for the overall economic situation, while a value below 100 suggests a negative assessment.
Opinion polls by polling agencies suggest thanks to the stabilization of the exchange rate, future expectations improved among the public. However, current economic conditions weakened vis-a-vis February across the board, as the negative spill-over from Ukraine War escalated price pressures, undermining real disposable incomes.
Economic confidence is reflecting the first stage of the upcoming inflation wave. Economists claim economic activity was already slowing down by February, a trend coupled with higher inflation momentum could drive the Economic Confidence Index even lower. The recent trough of the Index was recorded in April 2020, when Covid-19 first arrived in Turkey, with a headline value of 60.
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