Recovery… really?

As per the official data, Turkey’s seasonally adjusted consumer confidence index increased by 3.1 points in June to 62.6 from 59.5 in May.

The financial situation expectation of household index for the next 12 months moved up t0 79.9 in June from 79.2 in May. So did the general economic situation expectation index improved to 85.5 this month from 81.8 in the previous month. In contrast, the number of people unemployed expectation index also rose; to 62.1 from 55.3 in May. The probability of saving index in the next 12 months period which was 21.7 in May increased to 23.1 in June. 

Seasonally adjusted consumer confidence index, June 2020

The results of course point to a recovery since the peak of the coronavirus related lock downs in the economy. Yet, the re-opening of the economy in late May has hardly created the expected strong bounce by the government ranks. In fact, with delayed demand is not flooding the economy, Minister Albayrak’s claimed positive GDP growth is hardly happening with the “V” shaped recovery not in the cards.

The June preliminary figures point to only gradual improvement at the cost of a very high fiscal deficit which is of course not sustainable. The central bank rate cuts and the heavy lending by the public banks are not having a tangible impact on investment tendency; for Turkey has a resource problem and the problem of ambiguity in its economy management.