Consumers wary as confidence declines

ISTANBUL- Hürriyet Daily News

Consumer confidence in Turkey dropped from 91.1 points to 88.8 points.

Consumer confidence in Turkey dropped from 91.1 points in August to 88.8 points in September, its lowest level since August 2010, according to official data released yesterday.

After a slight recovery in July, the consumer confidence index declined once more in August before plummeting in September to its lowest level in the last 25 months. Such drastic numbers have not been seen since August 2010, when the index was at 87.35 points.

“We still think the consumer confidence points to a very limited consumption growth, as during the 2009 global financial crisis the consumer confidence index in Turkey was below 70,” BGC Partners Chief Economist Özgür Altuğ said in a note to investors.

“The possibility of purchasing a motor vehicle or a house improved in September even compared to August. The deterioration mostly came from the worsening in overall expectations about economy and purchasing power,” he said.

Altuğ expects a further decrease in consumer confidence in October, due to the ongoing conflict in Syria.

‘Paves the way for limited upper end cut’
“This data, along with other macro data, also paves the way for a limited upper end cut by the Central Bank, in our view,” he said.

The data shows that uneasiness in the markets is persistent, Integral Securities Analyst Ozan Batu told Anatolia news agency. The recent volatility in oil prices and the increasing unemployment in Turkey are among some of the underlying factors behind falling consumer confidence, according to Batu.

According to the Turkish Statistical Institute (TÜIK), the decrease in consumer confidence stems from consumers’ lack of confidence in purchasing power, job opportunities in the coming economic period, and the general economic situation.

The monthly “Consumer Tendency Survey” is jointly issued by TÜİK and the Turkish Central Bank. The consumer confidence index can take a value between zero and 200. Readings above 100 indicate an optimistic outlook, while those below 100 are considered pessimistic.