Everyone plays a waiting game


Turkey is jogging on to the elections. We will go to the polls in mid-May, but there is a lot of uncertainty. It is debatable whether President Erdogan will be a candidate once again if the parliament does not use its dissolution power. The parliament can only use this power with the support of the opposition, but there is no such support. How Erdogan will be a candidate, if May 14 is decided by the President, is also debatable… The candidate of the opposition is not yet clear. If the election is not concluded in the first round, what awaits us in the time that will pass until the second round? This is what worries the most.

In such an environment, everyone is almost on the prowl for groping. The speed is reduced as much as possible to avoid an accident, according to the data from the Central Bank and TurkStat last week. All sectors are almost on a knife edge and prefer to act too cautiously.

When we look at the index that measures the real sector confidence in the economy, there seems to be some confidence boost from December to January. The index, which was 101.6 in December, increased to 103.4 in January, that’s all. But there is a remarkable decline compared to January last year, which should not be overlooked. The real sector confidence index saw the 111.9 level in January 2022.

TurkStat also announced the January results of the service, retail trade, and construction sector confidence indices. They are dominated by stagnation and anxiety. Although there is not a great movement in the general indices, it is noteworthy that future anxiety is very evident in sub-indices. 

For example, the service sector confidence index decreased by 1.7% in January compared to December. But the devil lies in the detail. The business situation in the last three months and the demand for services in the last three months are the same in January as in December. However, there is a 5% drop in the expectation of demand for the services in the next three months.

Business volume and sales increased by 5.8% in the retail trade confidence index in the last three months. But a 7.7% decrease is expected in the business volume and sales in the next three months.

For example, the level of registered orders in the construction sector confidence index increased by 7% in January compared to December. The index, which shows the expectation of the total number of employees in the next three months, decreased by 4.4%. The expectation that the number of employees will decrease is undoubtedly an indicator of the prediction that the business volume will decline. 

Uncertainty until the elections

It seems that people will make tiny distinctions when undertaking any economic activity or running the existing business until the election. Because Turkey has never gone to an election full of such uncertainties. Elections result in a change of management at most. But is it so now? After which election has the economic policy changed almost fundamentally? There are so many things that are certain or likely to change if the power changes… Which businessperson makes radical decisions in such an environment and acts accordingly? 

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