The consumer confidence index increased 5% m/m in March after easing in the previous three months, data of the statistics institute TUIK showed on Friday.

Households’ assessments of the general economic situation (in the next 12 months) improved significantly with the relevant sub-index rising 6.1% m/m while the participants of the TUIK survey suggested that the current economic situation is better compared to the past 12 months. Consumers expect labour market conditions to improve in the coming months. The relevant sub-index that dropped in the previous four months rose by 4.9% y/y in March.

The index measuring the probability of savings in the next 12 months jumped 9.6% m/m after falling 15.8% m/m in February. The index for probability of buying a house rose 39.6% m/m after falling sharply 17.1% m/m in the previous month. The probability of borrowing money, however, fell 4.7% m/m that followed a 2.1% m/m decline in February.

The results of TUIK’s consumer sentiment survey are rather surprising given the ongoing political turmoil and uncertainties. It is difficult to see why households expect the economic situation to improve over the next 12 months, as most analysts believe the Turkish economy will slow due to a weaker domestic demand. As an indicator of consumer demand, white goods sales fell 13% y/y in February and the auto market contracted 26% y/y in the same month with passenger car sales falling 18% y/y.