Turkey

Mixed signals are coming out of the Turkish retail sector, with sales volume making strong gains while at the same time consumer and business sentiment cooling. Incoming data point to growing pessimism over the economy. However it will be a while before the heat is taken out of the marketplace in the coming months.

The banking regulator in Turkey has moved to stem a rising tide of consumer borrowing, announcing new limits on credit card debt and additional risk management requirements for lenders.

Long one of the driving forces of Turkey’s economy, the construction industry appears to be slowing down, with questions surrounding project financing and interest rate hikes dampening the sector’s outlook.

The weakening of the lira could herald further problems for the cooling Turkish economy, with growth forecasts being scaled back and an expanding trade deficit taxing government efforts to keep interest rates low and inflation under control.

The tourism industry in Turkey is still trying to assess the medium-term cost of a wave of anti-government protests at the end of May and through June, but recent figures suggest at least some holiday-makers are choosing to forego a visit this summer.

Despite an improved performance so far in 2013, Turkey’s automotive sector is expected to continue to face hurdles over the coming years. The economies in some of its main export markets are underperforming and new challenges are arising from other producers looking to launch a drive into Europe, potentially raising the level of competition at home and abroad.