Turkey’s economic confidence index fell by a sharp 5% m/m to 93.5 in May, the lowest level seen since February 2017, data from national statistics office TUIK showed on May 30.

The 100-mark separates optimism from pessimism. May's reading meant the index was recorded as in pessimistic territory for the second consecutive month.

“Higher rates, a weak currency and a confidence shock curbing economic activity and likely pushing a rebalancing theme in the second half,” Timothy Ash of Bluebay Asset Management said in an e-mailed note, commenting on the economic confidence data release.

Previously, the index jumped by 10% m/m to 104.9 points in January, the highest level registered since August. The indicator hit a five-year high of 106.4 last August but gradually declined across the four following months to 95.3 in December. Since the January reading of optimism, the index has declined.

All the sub-indices of the headline economic sentiment index were down in May.

The seasonally-adjusted business confidence index declined further, though very slightly, from 106.8 in April to 106.7 in May, the lowest level since June 2017.

The adjusted index saw 110.9 points in January, the highest level since October last year, and then posted declines for the next four months.

The seasonally-adjusted services confidence index decreased, for the fourth month in a row, by a sharp 5.3% m/m to 92 in May. The index saw 102 in January and has declined since then.

The seasonally-adjusted retail confidence index also declined for the fourth consecutive month, by 3.2% m/m to 97.1. The index saw 106.2 in January and has subsequently fallen in each following month.

The seasonally-adjusted construction confidence index decreased by 2.1% m/m to 77.2. The index rose to 87 in January and then posted declines in the following four months in a row.

Consumer sentiment in Turkey declined by 2.8% m/m to 69.9 on the index in May, the lowest level recorded since December, data from national statistics office TUIK showed on May 23.