The economic confidence index in Turkey, which was 97.8 in June, rose to 100.1 in July. The increase in the economic confidence index stemmed from the increases in the real sector (manufacturing industry), services, retail trade and construction sector confidence indices. In July, real sector confidence index rose to 112.1, services confidence index rose to 114.8, retail trade confidence index to 109.6 and construction confidence index to 86.3. Consumer confidence index decreased to 79.5.
The increase in activity, which was reflected in the sectors with the vaccination measures and the gradual opening up in the economy, also brought the economic confidence index up above the 100 base value for the first time since May 2018. After the emergence of the Covid-19 epidemic, the quarantine measures taken caused job loss in many sectors during the pandemic period, and the resulting conditions caused income loss due to the closure measures, especially in the service sector. In the phase of the return of the conditions of 2020, we saw a periodic regression, especially in the May period, as the impact of the increased cases caused harsh isolation measures to be taken. The activity, which was revived with the vaccination and reopening, also reflected on the sectoral confidence indices. While consumer confidence declined in July; It is seen that the sub-indicator that brings the index down is the financial situation index of the household in the current period.
In the service sector, where the most significant changes and effects are seen, we see the reflections of the gradual opening moves and the removal of time and day restrictions as of the beginning of July. In this context, the occupancy of cafes and restaurants along with the mobilization of social environments, the increasing travel due to the long holiday period and the effects of the revitalized tourism season positively affected the service sector index. However, Covid cases are on the rise again and developments regarding the Delta variant need to be followed closely. In the retail sector, in addition to the effect of defensive food expenditures during the pandemic period, there is an increasing trend in secondary consumption, especially due to the re-increase in retailing activities.
As the sector most heavily affected by financial conditions, we expect the pressures on the construction sector to continue. Due to the high inflation, the CBRT’s continuation of its tight monetary policy will cause housing loan rates to remain the current high levels for a while. Accordingly, the rate of increase in loans will be far from the levels similar to those in 3Q20. We do not expect a housing loan campaign from banks in the near future. In the real sector confidence index, we will monitor the effects of both the input costs depending on inflation and the domestic and foreign demand conditions together. The increase in raw material prices pushes up production costs, and price pressures also affect product prices. Although foreign demand is positive with the improvement in global economies, it is positive for the export and production outlook; Increasing Covid infections, which will also affect domestic demand conditions, are important in terms of affecting delivery times and conditions. On the other hand, the rise in the real sector confidence index reflects the increasing momentum in production with the opening in July, simultaneously increasing mobility in the local economy and still strong foreign demand conditions.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
