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Kallanish Kallanish

Knowledge matters Knowledge matters

July, 14th 2020

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JUN 29
12:45

Turkey’s economic confidence continues recovery

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After showing signs of recovery from the coronavirus outbreak and rebounding in May, Turkey's economic confidence index increased further in June, by 19.1% month-on-month to 73.5. Confidence rose in all sectors, consumer, manufacturing, services, retail trade and construction, according to the Turkish Statistical Institute (TUIK).

Turkey’s construction confidence index increased by 33.1% in June from 58.5 in May to 78.0. (see Kallanish passim).

The consumer confidence index increased 5.2% to 62.6, the manufacturing sector increased 22.2% to 89.8, services increased 8.5% to 55.5, and retail trade increased 9.3% to 86.4 in June.

An economic confidence index above 100 indicates an optimistic outlook for the general economic situation, whereas below 100 indicates a pessimistic outlook.

Turkey’s steel industry made a very good start to 2020. In the first quarter, domestic steel consumption increased 42.3% on-year, while production rose 9.6%.

However, the pandemic hit the economy in April, slashing consumption -44% on-year that month, while production dropped -26.3%. The capacity utilisation rates of Turkish mills fell to 54% in April and all confidence indices dipped.

Following the easing of coronavirus measures in May and the Turkish government’s announcement of loans with below-inflation interest rates, consumption and economic confidence rebounded. These continued increasing in June.

Turkish steel consumption, production and sectoral confidence indices are expected to improve further unless a much-feared second wave of the virus hits the Turkish economy.