Confidence indices, which reveal the expectations of sectors such as the consumer and the real sector regarding the general economic situation, followed a positive course this month.
While the consumer confidence index, which was announced for the first time, was 80.1 in March, it increased by 9.2 percent on a monthly basis and became 87.5 in April.
While the index is calculated from the results of the Consumer Tendency Survey, the financial situation of the household in the current period, the financial situation expectation of the household in the next 12 months, the general economic situation expectation and the thought of spending on durable consumer goods indices also increased.
The real sector confidence index announced by the Central Bank increased by 2.8 points to 108 in April compared to the previous month. In the same period, the seasonally adjusted real sector confidence index increased by 1 point to 105.1. The index continued its upward trend in January, February and March.
In addition, the financial services confidence index increased by 6.4 points to 148.3 in April compared to the previous month. All sub-indices, including the business situation and the demand for services in the last 3 months, and the expectation of the demand for services in the next 3 months, affected the financial services confidence index in an upward direction. The index increased by 0.6 points compared to the previous month and rose to 141.9 in March.
While the economic confidence index was 98.8 in March, it increased by 3.5 percent on a monthly basis to 102.2 in April. According to the data announced by TURKSTAT, the real sector confidence index increased by 1 percent to 105.1 in the same period.
An index above 100 is a sign of optimism in the economy.
Istanbul University Faculty of Economics Lecturer Prof. Dr. Sefer Şener evaluated the indicators in the confidence indices.
Stating that the economic confidence index is above 100 indicates optimism about the general economic situation, Şener said that even the election process did not reduce the optimism expectations regarding the economy.
Şener pointed out that the economic confidence index consists of the consumer, real sector, service, retail trade and construction sub-sectors and stated that the increase in 3 out of 5 sectors this month is positive.
Emphasizing that the upward trend in the sub-sectors also shows that the increase will continue cyclically, Şener said, “What is remarkable is that the real sector (manufacturing industry) index, which has a 40 percent share in the economic confidence index, increased by 1 percent in April.” said.
Noting that the level of 105.1 in the real sector confidence index is also an important data, Şener said, “The most important factor of confidence in the economy, the fact that the manufacturing industry does not slow down and positive expectations for this industry increase, raises hopes. The growth of the manufacturing industry will support exports, employment and current account balance in the following months. On the other hand, this shows that the expectations of the producers regarding the economy are at positive levels.” he said.
Expressing that the consumer confidence index shows the expectations of the consumers, Şener made the following assessment:
“The fact that the consumer confidence index increased by 9.2 percent in April to the level of 87.5 shows that the expectations of the consumers regarding the economy are also positive in the last period. Positive consumer confidence is a factor that will suppress inflation and exchange rate expectations. From this point of view, it is extremely important that the expectations for the economy are rising considering the geopolitical situations, financial problems, supply problems, inflation problems and banking crises in the world economies on a global scale.”
“The fact that we are entering the period in which the gains will be seen is reflected in the indices”
Istanbul Arel University Faculty of Economics and Administrative Sciences Faculty Member Assoc. Dr. According to Cüneyt Dirican, the main reasons for the upward movements in confidence indices are the actions taken against the damages of the Kahramanmaraş-centered earthquakes and the improvement of the first negative effects and perceptions, the uncertainty in various topics will disappear with the election, the low volatility in the economy despite the problems in the global markets and internal dynamics, the inflation increase rate. He said that being in the process of decline can be counted as the fact that various projects started to come to life and emerge.
Emphasizing that if the upward movement in the indices continues, expectations will improve and continuity will be established, Dirican said:
Despite the rise in food inflation in the UK, Argentina with current account deficit and increasing inflation, and the global collapse of banks due to sticky core inflation in the USA, the volatility in oil barrel prices, dollar index and euro/dollar parity, earthquake and election atmosphere in Turkey. The fact that the exchange rate is in a floating parity and the interest rate is balanced can be considered among the factors that contribute to the formation of positive expectations for the post-election period. slippage can be expected.”
Drawing attention to the fact that shaping expectations in the right direction with strong communication and reducing some of the topics discussed by explaining them with cause-effect gain relationship for households and investors is an important factor in the direction and speed of these indices, Dirican said: The fact that we are entering a period in which the value, gains and productivity will be seen with concrete figures is reflected in these indices as a leading indicator.” he said.
