Deterioration of Turkish Consumer Confidence observed in July, according to statistics
In a recent development, the consumer confidence index in Ankara, Turkey, has taken a slight dip, according to data released on July 23. The index now stands at 83.5, a decrease of 1.8% compared to the previous month.
The decline in consumer confidence is reflected in various sectors. The consumer confidence index for intentions to spend on durable consumer goods is 102.3, a slight slip from the previous 102.6. Other sectors like retail trade and construction have shown a decline in confidence, indicating mixed economic signals.
The outlook for the general economic situation in the coming year saw a sharper fall of 4.2%, moving from 82.4 to 79.0. This suggests that consumers in Ankara remain cautious and somewhat pessimistic about the economic outlook.
The Turkish Statistical Institute (TÜİK) and the Central Bank collaborate to conduct the consumer tendency survey for calculating the index. The current index of 83.5 falls below the neutral 100 mark, indicating continued consumer skepticism.
Several factors are contributing to this cautious sentiment. The ongoing economic challenges, such as inflation and the slow impact of government policies, are significant contributors. Monetary policy, including rate cuts aimed at disinflation, has yet to show substantial results, adding to the skepticism.
Personal financial management also plays a role. Although a majority of households report a worsening economic situation, many feel more in control of their budgets, particularly in metropolitan areas like Ankara where living costs are higher.
Interestingly, there is a subtle behavioral shift towards spending for emotional relief amid financial strain. Consumers in major cities are increasingly engaging in "hedonic compensation"—indulging in leisure and entertainment despite economic pressures—as a form of emotional reward.
Despite these challenges, it's important to note that the index showed a very modest rise in June, albeit below the 100 mark, to 96.71 points. This suggests that while consumer confidence remains below optimism, there are signs of improvement.
The sub-index for households' current financial situation also saw a decline, dropping to 68.2 in July. Expectations for households' financial situation over the next 12 months decreased by 1.4%, from 85.8 in June to 84.6.
In July, the index for households' current financial situation stood at 68.2, a drop from the previous month. This indicates that while households may be feeling the pinch, they are not giving up on maintaining control of their finances.
As we move forward, it will be interesting to see how these trends develop and whether consumer confidence in Ankara will continue to show signs of improvement or if the current cautious sentiment will persist.
Businesses may experience a decline in consumer spending due to the dip in consumer confidence, as the index for intentions to spend on durable consumer goods has also seen a slight decrease. The ongoing economic challenges, such as inflation and the slow impact of government policies, are causing financial concerns among consumers, potentially impacting the finance sector.
