Turkey’s economic confidence rises in May - statistics office

Economic confidence in Turkey increased this month, the Turkish Statistical Institute said on Thursday citing a monthly survey.

Confidence rose to 96.7 in May from 94.7 in April, the institute said on its web site. The upswing was driven by confidence in the services and retail industries, the data showed.

The improvement in sentiment came despite fresh losses for the lira against the dollar this month -- the currency is down almost 20 percent this year -- and an acceleration in inflation to 70 percent in April, a two-decade high.

The economic confidence index is an amalgamation of indices for consumer confidence, manufacturing confidence and sentiment in the retail, services and construction sectors. Any reading below 100 reflects pessimism.

Turkey’s government has ordered the central bank to cut interest rates and then hold them steady as inflation accelerated, meaning that the cost of borrowing for consumers and businesses is a fraction of the annual inflation rate, helping to boost spending. The average annual cost of a commercial loan is 23 percent and a personal loan 28.1 percent, according to central bank data.  

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