Turkish consumer confidence falls to 6-year low in March

ISTANBUL - Doğan News Agency

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The Turkish consumer confidence index fell to a six-year low in March, with a sharp fall on the probability of savings and the expectation of increased unemployment.

The consumer confidence index calculated from the results of the consumer tendency survey carried out in cooperation with the Turkish Statistical Institute (TÜİK) and the Central Bank fell to 64.4 in March, a decrease of 5.4 percent from the previous month.

“The growth prospects have been deteriorating… Specifically, the deterioration in consumer confidence is at the 2009 crisis levels. We expect weak figures in the domestic demand for the first quarter of 2015,” Garanti Investment Chief Economist Gizem Öztok Altınsaç told Reuters.

Annual growth in Turkey’s GDP dropped to 1.7 percent during the third quarter of last year, compared with 4.1 percent in 2013. The slowdown was driven by weaker domestic demand and analysts’ future growth expectations continue to be low.

Deputy Prime Minister Ali Babacan said on March 13 that Turkey’s 2014 growth rates would be announced at below 3 percent. The official growth numbers for the last year will be announced soon.

“We need to set higher growth targets, but we can only achieve this by making structural reforms, not by means of temporary financial and monetary policies,” he said.

The general economic situation expectation index which was 90.87 in February fell by 5 percent to 86.3 in March. This decrease showed the number of consumers who expected a better general economic situation in the next 12 months decreased compared to the previous month.

The percentage of people who expected unemployment to rise over the next year reached the highest level since March 2009, while the prospect of people making savings also worsened. The probability of saving index fell by 17.5 percent to 20.61 in March, from 25 in February.

The consumer confidence index calculated from the survey results is evaluated within the range of 0-200. It indicates an optimistic outlook when the index is above 100, but it indicates a pessimistic outlook when it is below 100.

The financial situation expectation of household index also fell by 1.6 percent, to 85.37 in March, from the previous month. This fall showed the decrease in the ratio of better financial situation expectations of households in the next 12-month period, according to the official data.

In the monthly consumer tendency survey, consumers’ assessments on the current situation and their expectations for their personal financial standing and general economic situation are evaluated, while their expenditure and saving tendencies for the near future are measured.