Turkey’s economic confidence index moved up by 4.5% m/m from 98.9 in June to 103.4 in July, the highest level recorded since November 2013, data from national statistics office TUIK showed on July 28.

The index rose for four months in a row from February to May, at which point it entered positive territory (the 100-mark separates optimism from pessimism in representing Turkish economic players). June saw it dip back into the negative zone, but July's marked positive figure indicates a surge of optimism.

Of the five sub-indices of the economic confidence index, only the real sector confidence and construction industry confidence categories posted monthly declines in July.

Turkey's consumer confidence index recovered by 1.9% m/m to 71.3 in July from 70 in June, the lowest figure recorded since March’s 67.8.

Turkey’s business confidence index declined from 112.4 in June - the highest level recorded since May 2014’s 113.5 - to 109.5 in July.

The real sector confidence index was at its lowest ebb this year in January, mainly due to a significant depreciation of the Turkish lira plus political uncertainties amid terror attacks and the heated debate over the referendum on constitutional amendments for a shift to an executive presidency. The government introduced a set of stimulus measures during the first quarter in the build-up to the April 16 vote.

The tense political atmosphere stemming from the ongoing state of emergency, extended in mid-April for another three months, will continue to impair business and consumer confidence, holding back investment and consumption and keeping growth low by historical standards, Moody’s Investors Service warned in April.

The strong loss in momentum that the Turkish economy experienced during 2016 is expected to reverse only gradually as uncertainty recedes during the year, the European Commission said in May. Supported firstly by net trade, momentum is set to improve towards the end of the year as domestic demand benefits from improvements in monetary conditions and confidence, according to the EC.