WNAM REPORT: The Turkish economy’s confidence index hit a 10-month high while annual inflation expectations decreased, supporting a positive outlook.
Türkiye’s economic confidence index hit 100.3 in March 2024 but the figure declined in the following months to as low as 93.1 in August and started recovering toward the end of the year.
The figure rose to 99.7 in January from 98.9 in December, according to data from the country’s statistical office Turkstat.
Meanwhile, the consumer confidence index reached 81 after seeing its lowest last year at 75.9 in July and ending the year at 81.3.
The real sector confidence index completed last year at 102.7 and reached 102.6 in January 2025.
The services confidence index fluctuated last year, reaching its highest of 120.4 in February and ending the year at 113.6. The index started the new year with a rise, reaching an eight-month high of 116.5.
Türkiye’s Central Bank (TCMB) released its Survey of Market Participants, which showed that the 12-month ahead inflation expectation for market participants declined 1.7 percentage points (pp) to 25.4%, for real sector by 3.8 pp to 43.8%, and for households by 4.3 pp to 58.8%.
Finance Minister Mehmet Simsek said in a statement that inflation estimates are critical for determining the pace of disinflation, pledging to work toward reducing inflation permanently.
Erhan Aslanoglu, economist at Istanbul Bilgi University, told Anadolu that the confidence indices show that there is a sectoral differentiation in the economy, as the services gradually improved while the competitiveness of the Turkish industry weakened, though a movement was seen in the construction sector with the recent rate cut.
“Demand in services continued at a certain level and it will continue, while the data suggests the economy will grow at around 3%, mainly driven by services,” he said.
“Domestic and foreign demand led to a revival in the industry sector, though data showed that problems in exports, especially to the EU, are on the rise, as competition and pricing are the main barriers against the growth of industry,” he added.
