Turkish economic confidence tumbles to record low in September

ISTANBUL - Reuters

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Turkey’s economic confidence index took a record plunge in September, data showed on Sept. 29, in the starkest evidence yet of the damage political uncertainty and escalating violence have done to its long-term outlook.

The index, the broadest measure of sentiment about the economy, 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.

The index indicates an optimistic outlook about the general economy when it is above 100 and indicates a pessimistic outlook when it is below 100.

After years of strong growth, Turkey’s over $800 billion economy is now weighed down by political uncertainty ahead of snap elections on Nov. 1.

That, together with almost daily bloody clashes following the collapse of peace process in July, have sent the lira currency to a series of record lows.

“The fall in the index is driven by lira weakness and political uncertainty,” Oyak Invest economist Mehmet Besimoğlu said. “Global risks have risen but additionally there is an impasse in domestic politics and in economic reforms,” he said.

Turkey’s lira is among the worst performing emerging market currencies this year. It has dropped to a fresh record low of 3.0750 versus the dollar last week, bringing its losses to more than 24 percent.