Turkey's economic confidence drops to lowest level in more than year

Economic confidence in Turkey declined to the lowest level in 13 months after inflation surged and the lira slid against major currencies.

Confidence worsened to 93.6 points this month from 96.7 points in May, the Turkish Statistical Institute said on Wednesday. Any reading below 100 points reflects pessimism about the outlook.

Turkey’s government is seeking to boost economic growth ahead of elections next year by ordering the central bank to cut interest rates and then keep them on hold to boost borrowing. But the lax monetary policy, coupled with unorthodox economic measures, has led to inflation of 73.5 percent, the highest reading since 1998, and a slump in the value of the lira.

The index of economic confidence is an amalgamation of other previously published measures of sentiment among consumers, the manufacturing sector, and the retail, services and construction industries.

A fall in consumer confidence during the month had the biggest impact on overall sentiment, the figures showed. Confidence among consumers worsened to 63.4 points in June from 67.6 points in May.

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