Turkey: Business confidence continues to slide in October, albeit at a reduced rate
The Real Sector Confidence Index published by the Central Bank declined from 89.6 in September to 87.6 in October, marking the seventh consecutive monthly decline and a fresh multi-year low. As a result, the index moved further below the 100-point threshold that separates optimism from pessimism among firms.
The deterioration came on the back of falling confidence regarding total current orders; and output, employment and export orders over the next three months. On the other hand, firms rated the general business situation more positively, likely thanks to a period of greater calm in financial and exchange rate markets.
In terms of prices, firms’ inflation expectations for the next 12 months continued to skyrocket, reaching 28.2%. Inflation expectations have now risen almost uninterruptedly since the start of 2018, and their impact on price-setting behavior presents a major challenge for the Central Bank in its efforts to rein in inflation.