Turkey's Economic Confidence Index Rises By 3.6 Pct. In April

- Turkish economic confidence index increased by 3.6 percent to 79.66 in April, after the big plunge in the previous month, according the data released by Turkstat on Tuesday. The index dived by 15.4 percent in March to 74.85, the lowest level in its 15-month history.

This increase in economic confidence index stemmed from the increases in consumer and real sector (manufacturing industry) confidence indices, Turkstat said in the statement.

Economic confidence index indicates an optimistic outlook about the general economic situation when the index is above 100, on contrary it indicates a pessimistic outlook when it is below 100.

Consumer confidence index increased by 1.5 percent, increasing from 64.39 to 65.35 in April. Real sector confidence index increased by 1.5 percent in April compared to the previous month, while the index was 101.20 in March, it rose to 102.70 in April.

Services confidence index decreased by 0.5 percent, decreasing to 100.53 from 101.03. Retail trade confidence index, which was 103.03 in March, decreased by 1.2 percent compared to the previous month and became 101.84 in April. Construction confidence index dropped to 81.16, decreasing by 2.7 percent compared to the previous month.

Economic confidence index is a composite index that encapsulates consumers’ and producers’ evaluations, expectations and tendencies about general economic situation. The index is combined by means of a weighted aggregation of normalized sub-indices of consumer confidence, seasonally adjusted manufacturing industry, services, retail trade and construction confidence indices.

In the calculation of economic confidence index, sectoral weights are not directly applied to the five confidence indicators themselves but to their normalized individual sub-indices. The point of normalization is to make variables comparable to each other.

Consumer sectors weight is applied to its four sub-indices, manufacturing industry weight is applied to its eight sub-indices, services sectors weight is applied to its three sub-indices, retail trade sectors weight is applied to its three sub-indices and construction sectors weight is applied to its two sub-indices.

Consumer confidence index as one of the composing indicators of economic confidence index is calculated from Consumer Tendency Survey results, which is conducted by the cooperation of TurkStat and Central Bank. Manufacturing industry confidence index is calculated by Central Bank and services, retail trade and construction confidence indices are calculated by TurkStat.