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.
The May data includes consumer reaction to the early elections announcement for polls on June 24. However, it does not include the feedback from consumers regarding the accelerating shapr depreciation of the Turkish lira (TRY) seen in recent days.
The TRY saw a fresh record low of 4.9294 against the USD on May 23, pointing to a 30% loss since the beginning of 2018 and a 22% loss in May alone. However, following an emergency rate hike announced late on May 23 the currency staged something of a recovery, pulling back to 4.5806 by 0745 local time on May 24.
Turkish consumers will go to the polls to elect the country’s first ever executive president and a parliament with a downsized role. The government has employed a set of pre-election stimuli but given the losses in the local currency, the stimulation package may not have had the desired impact on consumers’ assessments of economic conditions.
Turkish voters will also go to the polls in March 2019 for the municipal elections. They are also important, especially in terms of the governance of the large cities.
In December, the consumer confidence index hit 65.1, its lowest level in 2017. But the index jumped by 11% m/m in January to 72.3, the highest level recorded since May last year. The index posted a slight decline of 0.1% m/m to 72.25 in February. Consumer sentiment recovered slightly by 0.8% m/m to 71.9 in April on the index after losing 1.3% in March.
Home sales declined by 7% y/y to 303,877 units in Q1 while mortgage sales fell by 29% y/y to 89,380 units.
Private consumption in Turkey rose by 6.1% y/y in 2017, higher than the 3.7% recorded in 2016, according to the latest GDP data.
Fears that Turkey’s economy is overheating intensified on March 29 as Q4 GDP growth for last year came in at 7.3% y/y with the full-year 2017 expansion given as 7.4% after 3Q GDP was revised up 0.2pp to 11.3%.