NEWS ECONOMY NEWS        29/12/2020

Turkey’s economic confidence index decreases a further 3.5% in December 2020

According to figures provided by Turkey’s state statistical institution TÜİK (TurkStat), Turkey’s seasonally adjusted economic confidence decreased by 3.5% to 86.4 points in December 2020 from 89.5 points in the previous month of November. 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 due to the onset of the coronavirus pandemic. The recoveries of the index between May and October reflect expectations that the economy would normalise following the initial lockdown beginning in March. 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, both led to that month’s decrease of 3.5% in the economic confidence index. This month’s further decrease of 3.5% in the index reflects the Turkish Central bank’s additional increase in its interest rate of 200 basis points to 17% and continued fiscal tightening. This month’s 86.4 points level of the economic confidence index compares with the pre-pandemic 91.8 points recorded in March 2020.


In December, changes in the sub-indices are as follows: the consumer confidence sub-index remained the same at 80.1 points, the real sector confidence sub-index increased by 2.8% to 110.4 points, the services sector confidence sub-index decreased 9.2% to 70.4 points, the retail trade sub-index decreased by 7.8% to 87.6 points, and the construction sub-index decreased by 7.2% to 73.3 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. 


Turkey’s net minimum wage has been raised 50.52% to TL 4,253.40 (USD 319) as of 01.01.2022       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate rises further to 69.97% in April 2022       Turkey’s official unemployment rate jumps to 11.5% in March 2022       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 84,680,273 as of 2021 yearend       Foreigners visiting Turkey in 2021 increase by 94.1% to 24.7 million       Turkey’s private sector foreign debt is USD 169.4 billion as of 2021 yearend       Turkey’s economy grew 11% in 2021       Foreign Direct Investment to Turkey in 2021 was USD 14 billion       Turkey’s current account records a deficit of USD 14 billion in 2021