Turkey’s consumer confidence index declined by 1.8% m/m in February, after registering a 5.6% m/m increase in January, data from national statistics office TUIK showed on February 20.
Households’ general economic situation expectations weakened in the month with the corresponding sub-index declining by 0.3% m/m. Respondents expected unemployment to increase in the next 12 months, the TUIK survey showed. Turkey’s jobless rate hit 12.1% in November last year as economic growth lost steam.
Households’ financial situation expectations also worsened in February. The related sub-index was down 2.2%, after rising by 2.9% m/m in January.
Domestic demand is the backbone of economic growth. Households’ final consumption, which accounts for nearly 60% of Turkish GDP, declined by 3.2% y/y in the third quarter of 2016, when the economy contracted by 1.8% y/y, the first quarterly contraction in seven years.
In the face of weak economic activity, the government has announced a set of measures aimed at boosting consumer spending, such as tax cuts on white goods and certain housing projects.
The government forecasts that private consumption will increase 4.3% this year and 4.8% in 2018.
|TUIK's Consumer Confidence Sub-Indices|
|Consumer Confidence Index||75.0||67.7||73.6||74.3||74.0||68.9||63.4||66.9||657.0|
|Financial Situation Expectation of Households||92.4||88.8||93.2||92.1||94.1||89.0||85.4||87.9||85.9|
|General Economic Situation Expectation||101.9||91.8||99.9||102.9||101.6||95.1||86.0||88.6||88.0|
|Number of People Unemployed Expectation||81.8||67.3||78.4||80.4||77.2||71.3||65.4||68.9||67.9|
|Probability of saving||23.8||23.0||22.8||21.7||23.3||20.3||16.7||22.4||21.0|