TURKEY LOSES CONFIDENCE
According to the sectoral confidence indices by Turkish Statistical Institute (TUIK), confidence for services, retail trade and construction sectors decreased. The confidence index which was 103.5 for services, 103 for retail trade and 78.3 for construction sectors in previous month became 99.6, 98.2 and 77.1 respectively. Prof. Dr. Ayla Oğuş Binatlı, Head of Department of Economics, Izmir University of Economics, evaluated TUIK data and indicated that the decrease in retail trade and services sectors confidence indices were striking.
“We may say that this situation is a result of the economic and political upheaval Turkey is facing since May”, said Prof. Dr. Ayla Oğuş Binatlı and reminded that the signs about US Federal Reserve planning to stop buying bonds in May caused a stir in dollar. Prof. Dr. Binatlı stated that the increase in dollar created a major foreign exchange loss for companies with foreign currency debt.
‘Risk management in Turkey, still an issue’
Prof. Dr. Binatlı pointed out it was announced that US Federal Reserve would completely stop releasing dollar in the market towards the middle of 2014. She said, “This means the risk for companies with high foreign currency debt still continues because risk assessment in Turkey is still not conducted. The companies still believe that the money spent on risk management is a loss. One third of Borsa İstanbul companies declared loss for the first nine months. There is a 45% increase in the number of companies who made a loss compared to last year.”
‘Profit rates for retail companies worsened’
Prof. Dr. Binatlı stated that almost 5% decrease in retail trade sector confidence index indicated a worsening in the profit rates of other retail companies. She said the following:
“Turkish economy grew more than expected in the second quarter; however, it became evident that the growth number for 2013 would remain weak. Even though we are about to enter an election period, economic stagnation anticipation cannot be dismissed. And, sectoral confidence indices reflect this anticipation of public.”
