Consumer confidence continued to fall in November as consumers’ assessments of economic outlook, job prospects deteriorated.

The consumer confidence index declined 2.4% m/m after falling 4.9% m/m in the previous month, hitting a four year low of 68.7 in November, a regular survey by the statistics office, TUIK, showed on November 27.

The sub-index measuring consumers’ assessments of the current economic situation fell 3.5% m/m after a 5.7% m/m decline in the previous month while the survey showed consumers remained pessimistic about the economic outlook in the next 12 months even though the rate of decline in the related sub-index slowed to 0.9% m/m in November from 10.5% m/m in October. The index measuring how consumers view their current financial situation compared to the past 12 months was down 0.6% m/m after rising 1.4% m/m in the previous month. The index for current financial situation that rose 2.1% m/m in October fell 3.3% m/m in November.

The survey also showed that the index measuring the probability of saving was down 5.2% m/m after showing a 9.4% m/m rise in October but the probability of borrowing money in the next three months to finance consumption rose 7.7% m/m after falling 0.4% m/m. The index for the probability of buying a car in the next 12 months that rose 1.5% m/m in October was down 7.3% m/m in November. The decline in the probability of buying a house in the next 12 months was a striking 25.4% m/m.

The latest data confirm that domestic demand is weak and may continue to remain weak in the period ahead due to the geopolitical tensions, uncertainties over the global and the Turkish economy. The consumer price inflation is currently running at a stubbornly high 8.96%. Households' consumption rose only 0.4% y/y in Q2, down from 3.2% y/y in Q1, according to the latest GDP data. Household consumption, which accounts for around 70% of GDP, rose 1.8% y/y in the first half of the year.