The consumer confidence index rose 3.4% m/m to 66.45 in June, recovering from a six-year low of 64.3 in May on consumers’ improved expectations regarding the economic outlook, job prospects, and financial situation in the next 12 months.

The sub-index measuring consumers’ assessments of the current general economic situation compared to the past 12 months increased 6.5% m/m while consumers’ economic situation expectations in the next 12 months improved 4.7% m/m, according to data of the statistics institute TUIK.

The probability of saving plunged fell 1.3% m/m in June but this compared favourably with the 11.6% m/m decline registered in May. The probability of taking loans to finance consumption over the next three months fell 3.1% m/m after declining 6.9% m/m in the previous month.

The sub-index measuring the probability of buying a car in the next 12 months declined 6.2% m/m after falling 2.4% in May while the probability of buying home declined 2.7% m/m in June vs 6.8% m/m fall in the previous month.

The June 7 elections resulted in a hung parliament. The incumbent AKP lost its majority in parliament. Newly elected lawmakers will be sworn in on June 23. President Recep Tayyip Erdogan this week is expected to mandate PM Ahmet Davutoglu, the leader of the parliament's biggest party AKP, to form a coalition government. If no government is formed in 45 days, Erdogan will call for early elections that will take place in 90 days. If political uncertainties continue, this will weigh on consumer confidence and may hurt consumer sentiment in the short-term.