Macro and Politics

* TURKSTAT will release September Consumer Confidence Index at 10:00 local time. The Consumer Confidence Index rose from 89.8 to 90.8 in August, while its three-month moving average increased from 87.8 to 89.5. Across the sub-components, the financial situation of households at present, the financial situation expectation of households over the next 12 months, and the general economic situation expectation over the next 12 months all improved, while the assessment on spending money on durable goods over the next 12 months remained unchanged. The lack of improvement in households’ propensity to spend on durable goods remains consistent with signs of cooling domestic demand, while more favorable assessments of both household finances and the broader economic outlook supported the headline index.

* The unadjusted Real Sector Confidence Index (RSCI) declined by 0.8 points to 102 in September, while the seasonally adjusted RSCI edged up by 0.1 points to 102.5. Among the sub-components, assessments of the general course of business, current overall order books, total employment for the next three months and overall orders over the past three months contributed positively to the index. In contrast, export orders for the next three months, the current stock of finished products, fixed investment expenditures and production for the next three months weighed on the headline reading. Meanwhile, the Capacity Utilization Rate (CUR) increased from 73.5% to 74.2%, while the seasonally adjusted CUR rose from 73.5% to 74.1%. September data point to a recovery in capacity utilization, but little momentum in real sector confidence, alongside some deterioration in forward-looking expectations for production and export orders. Overall, manufacturing indicators continue to suggest a subdued underlying growth picture, reinforcing our cautious medium-term outlook. We therefore maintain our 2026 GDP growth forecast at 3.2%.