According to figures provided by Turkey’s state statistical institution TÜİK (TurkStat), Turkey’s seasonally adjusted economic confidence decreased by 3.5% to 89.5 points in November 2020 from 92.8 points in the previous month of October. This decrease follows rallies of 20.4% in May, 19.1% in June, 11.8% in July, 4.4% in August, 3.1% in September, and 4.8% in October following an initial collapse of 44.1% in April. The recoveries of the index between May and October reflected expectations that the economy will continue to revive following the initial lockdown earlier in the year due to the coronavirus pandemic. However, the worsening pandemic situation in Turkey in November and the change in the government’s economic team avowing to follow a tighter fiscal and monetary policy to combat inflation and support the Turkish lira, have both led to this month’s decrease of 3.5% in the economic confidence index. This month’s 89.5 points level of the economic confidence index this month compares with the pre-pandemic 91.8 points recorded in March 2020.
In November, changes in the sub-indices are as follows: the consumer confidence sub-index decreased 2.2% to 80.1 points, the real sector confidence sub-index decreased 2.1% to 107.4 points, the services sector confidence sub-index decreased 2.8% to 77.5 points, the retail trade sub-index remained at 95 points, and the construction sub-index decreased 5.7% to 79 points.
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.