A few bright lights
Turkey’s key sectors are in trouble, but there is a little good news buried in the rubble
TElections are over and we have reached the stage of forming the new government. Business circles and economists stress the need for immediate measures to ease the oppressive atmosphere in the economy. Inflation, exchange rates and interest rates are on an upward trajectory. It is hard to believe that this situation will not affect investments and consumption.
Breaking down the economy, we see that the situation differs from sector to sector. Tourism is going well. Revenues may be down but there are record increases in the number of visitors. Things are not bad either for the iron and steel industry with increases in production. In retail, both TurkStat figures and statements by sector representatives indicate a production increase of around 10 percent. White goods experienced a decline in April but the pace appears to have slowed in May and the five-month results indicate a positive outlook. The textile and ready-made garments sectors are also going well. Capacity utilization ratios indicate increases in production while export are up. Housing sales showed small increases due to the VAT and title deed fees deduction and interest rate incentives.
On the downside, the construc- tion sectors, including readymixed concrete and material indices, are showing a decline. Automotive fared badly as well, with June figures showing a 38 percent contraction in the domestic market. In logistics, foreign-plated vehicles have increased their share over Turkish-plated vehicles. Furniture sales are down 20 percent and chemical production began to decline after March.