Turkish economic confidence improves in January

Economic confidence in Turkey rose in January, reaching the highest level in three months.

The country’s benchmark gauge of confidence increased to 96.2 points from 94.7 in December, the Turkish Statistical Institute said on its website on Thursday. Any reading below 100 points reflects pessimism.

Turkey’s economy is expected to rebound this year as vaccines for COVID-19 are distributed across the globe, helping the country’s exports and crisis-hit tourism industry. The International Monetary Fund predicted economic growth for Turkey of 6 percent in 2021 in a report published this week.

Improving confidence in the economy during December was led by consumers and the service sector, according to the data. Sentiment in the retail, construction and manufacturing industries deteriorated, the institute said.

A sustained economic revival in Turkey is being constrained by double-digit inflation. The central bank has more than doubled interest rates to 17 percent since September to rein in price increases and to defend the lira, which slumped to successive record lows last year. The lira’s value has stabilised in January, helping the stock market to post gains.

Turkey's economic confidence index last exceeded 100 points in May 2018, just prior to a currency crisis in the summer that led to a deep economic contraction.