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 | |||||||||
Dec-13 | Dec-14 | Dec-15 | Sep | Oct | Nov | Dec-16 | Jan-17 | Feb | |
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 |
Source: tuik |