Turkey's calendar-adjusted retail sales volume index fell by 0.1% y/y in April after declining a revised 0.5% in March, national statistics office TUIK reported on June 8.
February's 4.4% annual contraction in retail sales was the highest posted since 2010, when the compilation of the retail trade data began. The March and April figures therefore mark a substantial deceleration in the descent of the index.
The Turkish retail sales figures have delivered annual contractions for seven consecutive months since October despite the government introducing stimuli on the way to the April 16 referendum on introducing an executive presidency. Annual retail sales growth slowed to 0.7% in 2016, the lowest annual rise ever.
Among sub-items, household appliances and furniture sales continued to post the highest annual declines, measured at 5.6% y/y in April despite the awarding of tax cuts. Food and beverages sales also posted an annual decline of 3.6% in April, the third consecutive annual contraction.
Turkey's consumer confidence index improved by 2.1% m/m to reach 72.8 in May, the highest level recorded since October last year. Turkish consumers seem surprisingly willing to spend despite a strong set of regional and domestic security threats. The consumer confidence index has shown an improvement in each of the three months since February.
Meanwhile, retail confidence in May improved on a monthly basis for the fourth month in a row, according to the latest survey by TUIK. The seasonally-adjusted retail confidence index rose 1.1% m/m, slowing from the strong 4.1% m/m gain registered a month ago.
Turkish retailers have been recorded as optimistic in the last two months following a period of pessimism running from September 2016 to March.
The strong loss in momentum that the Turkish economy experienced during 2016 is expected to reverse only gradually as uncertainty recedes during the year, the European Commission said last week. Supported firstly by net trade, momentum is set to improve towards the end of the year as domestic demand benefits from improvements in monetary conditions and confidence, according to the EC.
The OECD is forecasting that private final consumption growth in Turkey will decline to 3% in 2017 from 4.1% in 2016.