Turkish economic confidence drops for first month in seven

Economic confidence in Turkey fell for the first time since April after the lira slumped to a record low and the government tightened measures to curb the spread of the COVID-19 virus.

The benchmark index of confidence among businesses and consumers fell to 89.5 points in November from 92.8 in October. Any reading below 100 points reflects pessimism.

Confidence among companies in the construction industry led the decline, decreasing to 79 points from 83.8 points, the figures published by the Turkish Statistical Institute on Friday showed.

A slump in the value of the lira to an all-time low of 8.58 per dollar on Nov. 6 prompted Turkish President Recep Tayyip Erdoğan to sack the governor of the central bank the following day. Treasury and Finance Minister Berat Albayrak, Erdoğan’s son-in-law, resigned on Nov. 8.

The lira has since rallied to around 7.8 per dollar, partly due to an increase in interest rates by the central bank. Borrowing costs for banks now stand at 15 percent compared with a previous 10.25 percent.

Confidence among consumers, manufacturers and businesses in the services industry also declined, the institute said. It remained unchanged at 95 points for the retail sector.