Confidence in the economy is at a 20-month high

The economic confidence index increased by 14.6 points in January compared to the same month last year, reaching 97.1, which was the highest in 20 months.

According to information compiled from Turkish Statistical Institute data, the economic confidence index, which is a composite index that summarizes the evaluations, expectations and tendencies of consumers and producers regarding the general economic situation, was at the level of 105.2 at the beginning of 2018. The index, which started to decline due to speculative exchange rate attacks, geopolitical developments and global trade wars, dropped to 75.2 in October 2018.

As a result of the measures taken and policies implemented by the government and economic management, the decrease in interest rates and inflation and the decrease in geopolitical risks compared to the past increased confidence in Turkish lira assets and enabled the economic confidence index to enter an upward trend.

The economic confidence index has continued its rise since September last year and started the new year with an increase. The index increased by 0.6 points in January compared to the previous month and by 14.6 points compared to the same month last year, thus reaching a 20-month peak of 97.1.

Confidence in construction and retail sectors is at its highest level in 2 years

The recovery in the economy and the decline in interest rates also showed themselves in the construction sector confidence index. The construction sector confidence index reached 78.9 points with an increase of 22.2 points in January compared to the same month of the previous year, reaching its peak in nearly 2 years.

On the other hand, there are positive developments in the retail trade sector with the expectation that domestic demand will remain vibrant and potential growth figures will be seen in the coming period. The retail trade sector confidence index, which has been above 100 since October 2019, reached 105 points in January, reaching its highest level in 24 months.

“The momentum will continue in the coming months”

A1 Capital Investment Securities Research Expert Aylin Cevizci said that index data in 5 different categories were included in the calculations.

Stating that it is a positive development that the economic confidence index started the new year with an increase, Cevizci said, “From the index sets, it is observed that the construction sector confidence index has also increased. When we look at the main reasons for the rise of the index, we can see that the campaigns carried out especially in the housing sector, the continuing downward trend in housing loan interest rates and the relationship between this and the loan volume.” “In addition, the resumption of unfinished constructions was among the developments that supported the revival of the sector. It is within our general expectation that the same momentum will continue in the coming months.” said.

Cevizci stated that when the other index series of the data are examined, they consider the recovery in the retail and service sectors and the limited improvement in the consumer confidence index as the results of positive signals in the economic outlook.

Stating that there is no macro or political expectation for Turkey that would damage the confidence indices, Cevizci noted that they expect the economic process to be passed under the discipline strategy to have a recuperative effect on the confidence indices.

Cevizci emphasized that the recovery trend will continue unless geopolitical risks and developments such as political and recent epidemics in the global outlook are effective, especially in the long-term economic process, and said, “The stable appearance of the exchange rate movement, the predictability in inflation and the re-strengthening of investment psychology will lead to the recovery of confidence data.” was among their priorities.” he said.

Source: https://www.aa.com.tr/tr/ekonomi/ekonomiye-guven-20-ayin-zirvesinin/1718003

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