Macro and Politics

* TURKSTAT will release September Economic Confidence Index @ 10:00 local time. The Economic Confidence Index rose by 0.8% from 99.8 to 100.6 in August, moving above the 100-threshold for the first time since February 2026. Among the sub-indices, the Consumer Confidence Index increased by 1% to 90.8, while the Real Sector Confidence Index rose by 1.2% to 102.4. By contrast, the Services Confidence Index edged down by 0.1% to 111.9, the Retail Trade Confidence Index declined by 0.8% to 110.1, and the Construction Confidence Index fell by 0.4% to 83.1. The return of the Economic Confidence Index above the 100 threshold points to a more optimistic assessment of the overall economic outlook. However, the improvement was driven by stronger consumer and real sector confidence, while confidence weakened across the services, retail trade and construction sectors in August. We therefore interpret the rise in the headline index as a limited improvement rather than evidence of a broad-based strengthening in economic activity. Amid tight financial conditions and ongoing signs of cooling domestic demand, we maintain our cautious medium-term growth outlook and keep our 2026 GDP growth forecast unchanged at 3.2%.