Feb 27 2018

Construction leads drop in Turkish economic confidence

Turkey’s economic confidence index dropped from a five-month high led by the construction sector and retail trade.

The index fell to 103 in February from 104.9 in January, which was the highest level since August last year, the Turkish Statistical Institute said on Tuesday.

Confidence in the construction industry declined 3.7 points to 83.8, while retail trade confidence decreased 1.5 points to 104.7. The consumer confidence index was unchanged at 72.3, while real sector confidence, which includes manufacturing, edged down 0.1 points to 110.8.

Turkey’s government is seeking to stimulate economic growth through measures including loan guarantees for manufacturers ahead of presidential and parliamentary elections, due to be held next year. The military operation in Syria's Afrin enclave and frequent public appearances by President Recep Tayyip Erdoğan have raised speculation that the elections may be brought forward.

The government is considering other stimulus measures to boost growth, including incentives for house purchases. The construction sector has led the economic expansion in Turkey since Erdoğan's ruling party won power in 2002,

The index, which encapsulates consumers’ and producers’ evaluations, expectations and tendencies about the general economic situation in Turkey, indicates an optimistic outlook when the reading is above 100 and pessimism when it is below 100.

Turkish economic confidence
Source: the Turkish Statistical Institute