Turkey’s economic confidence index rose to 85.9, continuing with the increase in real sector, retail trade and services sector, in August. Real sector confidence index increased to 105.2 in August period, service sector reached 70.5 and retail trade sector confidence index reached 94.9. Consumer confidence, which had a negative impact on the index, dropped to 59.6 and the construction sector confidence index to 85.
The economic uncertainty effect of Covid-19 and the increase in interest rates seem to have negatively reflected on consumer confidence and the construction industry. Other sub-indices, on the other hand, continue to recover with the easing of epidemic measures with normalization. In contrast, the recovery in the overall index in August seems to have lost momentum, somewhat due to concern over virus uncertainty. The increasing number of cases abroad and similarly the numbers that are on a certain band in our country cause an uncertainty about the course of the virus epidemic as the autumn period approaches.
Financing conditions facilitated in terms of private consumption entered the phase of tightening again as the volatility in TRY increased in August. In this context, the effect of the interest rate cuts made in the previous months has been over. In the new period, the rise in loan costs due to the increasing interest rates and the demand losing momentum accordingly may find negative reflections on the sectoral confidence indexes, especially on the consumer confidence and construction sector side.
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