Vice President Cevdet Yılmaz on Monday said the government is keen to ensure balanced growth while curbing inflation after official data suggested what he said signaled the real sector’s resilience in the face of formidable challenges.
The seasonally adjusted Real Sector Confidence Index index, which measures sentiment among manufacturers, rose by 1.2 points in November to 103.4, according to data by the Central Bank of the Republic of Türkiye (CBRT).
The figure represents the highest level since April 2024.
The increase was driven by improving assessments of order volumes, stock levels, export expectations and employment prospects. However, evaluations of fixed capital investment fell slightly, and production outlooks held steady compared to the previous month.
Yılmaz framed the latest data as evidence of resilience and commended the resilience and dynamism of Türkiye’s real sector despite global and regional challenges.
“The dynamism shown by the real sector supports our forward-looking macro policy framework,” he stated. “We engage in consultation with the real sector during the policy formulation and implementation stages.”
“While making progress in reducing inflation, we maintain our perspective of balanced growth. We will continue to build our future on solid ground with investment, employment, production and exports, and grow steadily in stability,” said the vice president.
Tight monetary policy, fiscal measures and base effects brought annual inflation down to 48.58% in October from a peak of 75.45% in May.
The country’s central bank earlier this month raised its year-end inflation forecasts for this year and next to 44% and 21%, respectively. It previously forecast year-end inflation of 38% in 2024 and 14% next year.
The government anticipates end-2024 and end-2025 inflation of 41.5% and 17.5%, respectively.
The Turkish economy grew by 3.8% in the first half of this year, and the government projects growth of approximately 4% in 2025, with further acceleration to 4.5% and 5% in 2026 and 2027, respectively.
Separate data showed retail trade and construction sector confidence improved in November, while services sector confidence fell.
The sub-index for the services sector decreased by 2.9% on a monthly basis to 111 in November, according to the Turkish Statistical Institute (TurkStat). The retail trade and construction sector confidence indices rose 0.9% to 111.7 and 1.7% to 87.8, respectively.
Calculated from a monthly survey, results are evaluated within a range of 0-200. Sectoral confidence indices above 100 signal an optimistic outlook, and a pessimistic outlook when below 100.
Another data by the CBRT showed the capacity utilization rate of Türkiye’s manufacturing industry increased in November, reaching 76.1%.
That marked an improvement of 1.2 percentage points compared to the previous month. On a seasonally adjusted basis, the rate rose by 0.4 percentage points, reaching 75.6% in November.
Intermediate goods production had the highest utilization rate at 75.5%, while durable consumer goods recorded the lowest at 72%.
The figures are derived from responses to a business tendency survey conducted among local manufacturing units. The CBRT reported that 1,755 companies participated in the survey this month, noting that the results reflect the participants’ feedback and not the bank’s predictions or policy views.
The capacity utilization rate is a key indicator of how much of an industry’s productive potential is being used, providing insights into overall economic activity.
