Expectations not met, confidence decreasing in Turkey’s economy

Expectation surveys that measure the confidence of the real sector and consumers regarding the economic policies applied and their expectations related to the future are good way to feel the pulse of both the companies and the consumers, as well as help interpret expectations.
 
The December 2014 survey results have shown that confidence is decreasing in the economy policies and their results as implemented by the ruling Justice and Development Party (AKP). Especially since mid-2013, when the U.S. announced that it would start a new monetary climate, it is being observed that expectations – even though they show some increases from time to time – are trending downward.

The Central Bank’s survey results on “expectations” revealed that expectations made in 2013 for the upcoming year had not come to pass by the end of 2014.

Expectation surveys are conducted by the Central Bank each month to monitor the expectations related to various macroeconomic variables of decision-making and experts in the financial and real sector. The questions in the survey cover short and long-term expectations about basic macroeconomic variables, such as consumer inflation, exchange rate, current account balance, growth rate of gross domestic product and interest rates. The panel of participants is chosen among decision-makers, experts and professionals in the financial and real sectors, and also among experts in foreign financial institutions. Participation is on a voluntary basis.

Those who participated in the Central Bank’s expectation survey conducted in December 2013 estimated that the dollar exchange rate would be 2.1 Turkish Liras at the end of 2014. However, estimates failed and the expected dollar exchange rate did not happen. The...