Turkey's economic confidence index reached 80.7 in July dropping 3.3 percent from June, the Turkish Statistical Institute said Tuesday.
The institute attributed the decline to a fall in consumer, real sector, services and retail trade confidence indices.
"Consumer, real sector, services and retail trade confidence indices decreased to 56.5, 96.6, 83.5 and 90.4 respectively in July," it added.
Meanwhile, Turkey’s government told bankers that it will increase a borrowing ceiling after it exceeded targets for debt sales and the budget, Bloomberg reported.
Officials told the bankers in a meeting last week that they will raise the government’s debt rollover goal to between 100 percent and 110 percent, Bloomberg said, citing people with direct knowledge of the matter.
Turkey’s initial target for the rollover ratio – the amount of debt sold compared with repayments due – was 93.5 percent for 2019 compared with 98.1 percent last year.
Turkey is seeking to find more funds to stimulate economic growth after a currency crisis last year ravaged consumer and business sentiment. The central bank slashed interest rates by 425 basis points to 19.75 percent last week. The decision came after President Recep Tayyip Erdogan sacked the bank’s governor earlier in July for failing to lower lending costs.
Turkey would need to roll over 90 percent of its debt repayments in the remainder of the year in order to meet a revised target of 110 percent, according to Inan Demir, an economist at Nomura in London, Bloomberg said.
“It is not impossible but would require improvement in revenue performance, some of which may come from the transfer of past central bank profits, and/or stricter spending discipline,” Demir said.
