Turkey's calendar-adjusted retail sales volume index rose by just 1.3% y/y in August, marking the lowest annual growth rate recorded since February 2017, national statistics office TUIK reported on October 17.
Consumers are tightening their belts with the country mired in a currency crisis and wary of sliding into a debt crisis. The economy is being buffeted by rising double-digit inflation which is at a 15-year-high, with Turkey now threatened by a steep recession likely to materialise in months ahead.
Turkey’s economic confidence index declined by 15.4% m/m to 71 in September. It was the biggest drop seen since November 2008. The fall, detailed by data from national statistics office TUIK released on September 27, follows the 9% m/m decline recorded in August.
The seasonally-adjusted retail confidence index declined by 5.2% m/m to 88.5 following a 4% m/m fall in the previous month, central bank data showed on September 24.
The consumer sentiment reading saw its biggest decline in at least 14 years in September, falling 13% m/m. That was the sharpest monthly decline recorded since 2004 when the index was first compiled, and followed the 7% m/m drop posted in August. The index figure of 59.3 registered in September was the lowest level registered since September 2015, data from TUIK released on September 20 showed.
Monthly annual retail sales growth rates in the year to date peaked at 10.8% in January, then slowed in the following two months before moving up to 8.3% in April. Retail sales growth subsequently declined sharply in the following four months.
Turkey’s average annual retail sales growth jumped to 5.5% in 2017 from 2.3% in 2016, according to the TUIK’s revised index. Based on the old series, year on year retail sales growth very slightly escalated from 0.8% in 2016—the lowest annual rise ever—to 1% in 2017.
Real private consumption growth declined to 6.3% y/y in Q2 from 9.3% in Q1 while private consumption’s share in Turkey’s overall GDP based on current prices also declined to 59% from 60.3%, according to the latest GDP data. Real private consumption growth was 6.1% in 2017 and private consumption’s share in overall GDP was 59%.
Average monthly annual retail sales growth declined to 6% in Q2 from 8.9% in Q1 2018, according to TUIK’s retail sales data.