According to figures provided by Turkey’s state statistical institution TÜİK (TurkStat), Turkey’s seasonally adjusted economic confidence index increased by 4.4% to 85.9 points in August 2020 from 82.2 points in the previous month of July. This increase follows rallies of 20.4% in May, 19.1% in June and 11.8% in July after an initial collapse of 44.1% in April. The recoveries of the index in May, June, July and August reflect expectations that the economy will continue to revive following the lockdown due to the coronavirus pandemic. The 85.9 points level of the economic confidence index this month compares with the pre-pandemic 91.8 points recorded in March 2020.
In August, the real sector confidence sub-index increased 5.8% to 105.2 points, the services sector confidence sub-index increased 5.7% to 70.5 points, and the retail trade sub-index increased 0.2% to 94.9 points, whereas the construction sub-index decreased 2.3% to 85 points and the consumer confidence sub-index decreased 2.2% to 59.6 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.