Economic confidence in Turkey surges by over 20% in May amid normalization

Turkey's economic confidence index improved sharply to 61.7 in May, the country's statistical authority said on Thursday.

The May figure jumped 20.4% amid Turkey's normalization from the waning coronavirus pandemic, Turkish Statistical Institute (TurkStat) data showed.

The index had plunged 44.1% month-on-month in April to 51.3 points as it felt the impact of the outbreak.

The month-on-month rise in May was driven by improvements in the consumer, real sector, services, retail trade and construction confidence indices.

The construction confidence index surged the most from last month, at 31.1%.

The service and consumer confidence indices followed with 10.8% and 8.5% rises, respectively.

The retail trade confidence index also saw a 5% increase.

Commenting on the data, Erhan Aslanoğlu, an economy professor at Istanbul-based Piri Reis University, said these indices saw sharp decreases in the last two months due to the high level of uncertainties created by COVID-19.

In May there has been a decline in the number of cases and deaths, creating a relatively positive atmosphere compared to previous months.

These developments, along with the base effect, have led to rises in the confidence indices, he said, adding that the figures could go up or down suddenly depending on the pandemic's course.

The economic confidence index is a composite index that encapsulates consumers' and producers' evaluations, expectations and tendencies about the general economic situation, according to TurkStat.

It indicates an optimistic outlook about the general economic situation when the index is above 100, while it shows a pessimistic outlook when below 100.