Economic confidence index slips in December

Economic confidence index slips in December

Economic confidence index slips in December

DHA Photo

Economic confidence index decreased by 3.8 percent to 100.18 in December compared to previous month, amid rising tension between Turkey and Russia and uncertainties resulting from the rate hike decision by the U.S. Federal Reserve (Fed). 

The decrease in the economic confidence index stemmed from the drops in consumer, manufacturing industry, services, and retail trade confidence indices, according to statement by the Turkish Statistics Agency (TÜİK) on Dec. 29. 

Consumer confidence index dropped by 4.6 percent to 73.58 and manufacturing industry confidence index by 1.3 percent to 108.8 in December compared to the previous month, according to TÜİK data. Services and retail trade confidence indices also declined by 1 percent and 0.4 percent respectively, compared to November, dropping to 99.02 and 104.93 in December. Meanwhile, the construction confidence index saw a hike of 0.7 percent, rising to 85.11, according to TÜİK data. 

Oyak Investment Chief Economist Mehmet Besimoğlu told Reuters the economic confidence index is connected to fluctuations in Turkish Liras as well as local and international uncertainties. 

“The lira lost value against the dollar after the Russian jet was downed by Turkey on Nov. 24. The greenback also gained value against many currencies upon the assumptions of a rate hike by the Fed. A decrease in the economic confidence index was quite normal in December. We can expect a rebound in January 2016, unless the Russian crisis is [further] triggered, as the uncertainties have been clearing away after the Fed has already made its rate move,” he said, as quoted by Reuters. 

The economic confidence index took a record plunge in September amid political uncertainties and escalating violence ahead of the November elections. 

The index tumbled to 70.89 points in September from a revised 85.1 points in August, marking both the largest monthly drop and the lowest level since the statistics institute began compiling the data in January 2012.