Türkiye's economic confidence index increased in July, reflecting improved sentiment among consumers and service-sector businesses despite weaker confidence in manufacturing and retail trade, the Turkish Statistical Institute (TurkStat) announced on Thursday.

According to TurkStat, the economic confidence index rose by 0.9% month-on-month to 99.8 in July, up from 98.9 in June.

The improvement was driven primarily by stronger consumer and services sector confidence, while manufacturing and retail trade recorded modest declines.

The consumer confidence index climbed 2.2% compared with the previous month, reaching 89.8, indicating a gradual improvement in household expectations regarding the economy and personal financial conditions.

Confidence in the services sector also strengthened, with the index increasing 1.4% to 112.0, reflecting more positive business expectations among companies operating in tourism, transportation and other service industries.

Meanwhile, the construction confidence index edged up 0.6% to 83.5, suggesting a slight improvement in sentiment within the sector despite ongoing challenges related to financing costs and input prices.

In contrast, confidence among manufacturers weakened modestly. The real sector (manufacturing industry) confidence index declined 0.8% to 101.2, while the retail trade confidence index fell 1.6% to 111.0 compared with June.

The economic confidence index combines assessments from consumers and businesses across the manufacturing, services, retail trade and construction sectors, providing a broad measure of overall economic sentiment.

Although the index remained just below the 100-point threshold, which generally separates optimism from pessimism, the July reading indicates that confidence in the Turkish economy continued to improve gradually, supported by stronger consumer sentiment and resilience in the services sector.

Economists will closely monitor upcoming confidence and inflation data to assess whether the upward trend in economic sentiment continues during the second half of the year. (ILKHA)