NEWS ECONOMY NEWS        28/01/2021

Turkey revises its economic confidence index calculation method once again

Turkey’s state statistical institution TÜİK (TurkStat) has revised upwards its seasonally adjusted economic confidence index. The reason for this revision was given as the changes in the sectoral confidence indices. 

 

The index for December 2020 has been revised accordingly from 86.4 points to 94.7 points. The index for January 2021 has been recorded as 96.2 points, an increase of 1.6% on the revised figure for December.

 

The first revision was carried out in January 2019, when TurkStat changed its presentation of Turkey’s economic confidence index to allow for seasonal adjustments. The second revision of the index in January 2020 was carried out without any due explanation. These revisions, together with the third revision in January 2021, do not engender a feeling of much confidence in the index’s accuracy or even relevance. 

 

The index for January 2018 was increased from 105.2 points to 106.2 points in January 2020, and was increased further to 107.2 points in January 2021.

The index for January 2019 was increased from 78.5 points to 82.5 points in January 2020, and was increased further to 88.7 points in January 2021.   

The index for January 2020 was increased from 97.1 points to 99.3 points in January 2021.

 

In January 2021, changes in the sub-indices are as follows: the consumer confidence sub-index increased by 4% to 83.3 points, the real sector confidence sub-index decreased by 1.3% to 109 points, the services sector confidence sub-index increased 2.9% to 101.9 points, the retail trade sub-index decreased by 0.1% to 108.5 points, and the construction sub-index decreased by 5.2% to 84.2 points. The biggest revision was the 38.6% increase in the services sector confidence sub-index. 

 

Despite periodic upward revisions by TurkStat, Turkey’s economic confidence index is still below the crucial 100 points level. In Turkey, the economic confidence index is a composite index that covers encompasses consumers’ and producers’ evaluations, expectations and tendencies about the general economic situation. The index is produced by a combination of a weighted aggregation of normalized sub-indices of consumer confidence, seasonally adjusted real sector (manufacturing industry), services, retail trade and construction confidence indices. The economic confidence index indicates an optimistic outlook about the general economic situation when the index is above 100, and contrarily indicates a pessimistic outlook when it is below 100. 

 



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