Today is Mother's Day; we would rather touch upon some favorable indicators after all of those pessimistic commentaries. Let us see what favorable development I can find. At least I know what to not do: I will not deal with data on the past. Yes, industrial production has felt down and so on, but there is no news here; everyone expected and knew that it would happen.

The real question is what will happen after this point.  Albeit I focused on this question several times; main determinants of the growth rate will be exports and level of foreign resources to flow in Turkey. Therefore, we will act more based on developments abroad. In this context I said in the previous commentaries that in the light of existing data, Turkey is to face problems in 2010.
Of course this estimation will not necessarily prove right only because I said so. It is wise to take a look at recently announced data based on which we can make prospective inferences. Let us see what the data in our information basket; i.e. 'updated forms of current data' say.

Among the data that helps you link the present with the future, expectations and loans are the most important. In my last commentary, I touched upon the difference between bank groups considering loan extending behaviors. Total level of loans was decreasing since the beginning of October. On the other hand, level of loans extended by public banks was increasing.

On the day the commentary was published, loan data for the last week was announced. Now, let us focus on total loan level and consumer loans, which is a sub-item, rather than focusing on bank groups. Furthermore, let us forget what has happened since October and focus on the recent weeks. In this context, this picture appears: During the last four weeks, fall in total loan level has stopped. This does not change whether you consider only deposit banks or also add investment banks into the picture.

Data on total loan level is announced one week before data on consumer loan; thus, data on the latter is more up-to-date. Level of consumer loans has been increasing for six weeks. This is valid for both credit cards and consumer loans in other forms apart from credit cards. While total credit level is still below the level at the beginning of the year, consumer loans seem to reach that level.

Real sector confidence index announced by the Central Bank is among the most important expectation indicators. Downward journey of confidence as measured by the mentioned index began at the beginning of quarter 1, 2008. This fall was so steep that on December, the index decreased to a historical lowest level and 50.4 percent lower than March level.

Confidence index starts to go up beginning from December. Index level in April is considerably above that in December. Though, if we forget about the trends and focus on the 'moment', we see that the pointer is still inclined to the 'lack of confidence' side. However, it is also obvious that there is a certain recovery.

There is also more:  At the sub-items of indices before April, responses to questions on 'current condition' were unfavorable, and responses to prospective questions were favorable. Therefore, sub components of indices made us ask the question "what development justifies these favorable expectations?" However, on April, a recovery can also be observed in the responses to questions on the current situation.

There is no doubt that the main determinant will be the direction the conditions abroad will evolve in. In particular the track of the US economy is of great importance. There is a noise pollution with this respect and it becomes harder to pick correct signals. A commentary by Hasan Ersel on Referans daily of Friday is quite beneficial in this context.

As far as I am concerned, the commentary reads as the following in brief: It is possible to reach some inferences that the US economy will not get worse. But, under one condition: If the financial system starts to fulfill the expected functions; i.e. starts to extend loans. And a notification: That the things do not get worse does not change the fact that the current condition is bad enough.

This commentary was published in Radikal daily on 10.05.2009