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Economic confidence in Turkey drops to lowest level in 7 months

(Photo by Yasin AKGUL / AFP)

Turkey’s economic confidence index tumbled 1.8 percent month-on-month in December to 97.6 points, the lowest figure since May, data from the Turkish Statistical Institute (TurkStat) showed on Thursday.

The index, which points to an optimistic outlook when above 100 and pessimistic when below, hit a record low last year before recovering as coronavirus measures were eased in the summer.

The index climbed above 100 points in July for the first time since May 2018.

The drop was a result of decreases in all indices, i.e., the consumer, real sector, services, retail trade and construction confidence indices, TurkStat said in a statement.

The consumer confidence indicator stood at 68.9 points in December, down 3.1 percent compared to a month earlier. The real sector confidence indicator decreased by 1.7 percent month-on-month to 110.1, while the services confidence index declined by 0.5 percent to 118.8 points.

The retail trade confidence index fell 0.4 percent month-on-month to 121.5 points, and the construction confidence indicator lost 3.9 percent to reach 90 in the month under review.

The index results come after President Recep Tayyip Erdoğan on Dec. 20 unveiled an emergency plan to help the Turkish currency curb losses which stipulates that the country’s treasury will make up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed bank interest rates.

The instrument will apply for individuals holding lira deposit accounts with maturities of between three and 12 months. The minimum interest rate will be the central bank’s benchmark rate, and no withholding tax will be deducted.

Turkey’s Treasury and Finance Minister Nureddin Nebati was ridiculed on social media days after Erdoğan’s announcement for asking a reporter to look into his eyes and tell him what she saw when asked during an interview to provide information on the country’s new economic plan.

“The statistics are so good. Look into my eyes, Ms. Gülçin. What do you see?” the minister said in answer to a question by news anchor Gülçin Üstün Can regarding data on the country’s recently announced economy plan during an interview on the state-run TRT Haber.

“I see that happiness there, but the economy is about the numbers,” Can said after the minister failed to share any statistical data for Turkey’s new economic measures.

“[You say], ‘Economy is about the numbers,’ economy is about the wishes … the trust … the stability … the expectation. The economy is the sparkle in the eyes. My friends see the sparkle in my eyes,” the minister responded, attracting ridicule on social media.

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