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mayoral election, should also be cancelled if the mayoral vote is rerun, it added. The AKP won a majority in the councils but lost the mayoral vote to Imamoglu. The CHP said it was a nonsense that the YSK left results for district administrators, municipal councils and local officials unchanged because all four votes, including that for the mayor, were cast in the same envelope and counted by the same polling officials.
2.2 Business and consumer confidence surveys
Turkey’s consumer confidence index collapses 14%. Turkey's consumer sentiment index nosedived 14% m/m to 55.5 in May from 64.5 in April, data released by national statistics office TUIK showed on May 21. May thus saw the lowest consumer confidence reading and the sharpest monthly decline in consumer sentiment since 2004, the year the index was first compiled. TUIK also puts out a calendar-adjusted index in its consumer confidence press releases. Its reading fell by 13% m/m to 55.3. “The big picture is that the government implemented substantial fiscal stimulus in the run-up to March’s local elections, which appears to have returned the economy to growth in Q1. And with the Istanbul mayoral election scheduled to be re-run on 23rd June, more stimulus is on the cards in the coming weeks. But this is likely to lead to a fresh deterioration in the current account position, leaving the lira more vulnerable to bouts of investor risk aversion,” Liam Carson of Capital Economics said on May 17 in a research note. The new wave of depreciation seen this year in the Turkish lira, which gathered pace in March and April and took the currency to weaker than six-to-the-USD in May—a pyschologically important threshold—could be the main development that explains the sharp drop in the consumer confidence index.
Weak or deteriorating macroeconomic environments in Turkey will continue to negatively impact consumer confidence, said Moody’s Investors Service in a report on emerging markets on May 13. “Conditions in Turkey's consumer sector are likely to remain difficult through 2019 and early 2020, hindered by ongoing macroeconomic weakness, the impact of lira exchange rate volatility, high inflation and policy uncertainty,” it added. Turkey's weakening economy suggests challenging business fundamentals for its corporate and infrastructure sector, reflecting high interest rates and, for some, difficulties in accessing credit, according to Moody’s.
The International Monetary Fund (IMF) predicted in May that the Turkish economy will contract by 2.5% this year before growing at the same rate next year.
The country’s statistics office, TUIK, reported on April 22 that the consumer confidence index surprisingly jumped by as much as 6.9%
15 TURKEY Country Report June 2019 www.intellinews.com