ANKARA
The Consumer Confidence Index fell 5.4 percent in March, dropping to 64.4 points from 68.06 percent in the previous month, the Turkish Statistical Institute said in a statement Monday.
Consumers were worried about their finances, and about the economy. This was reflected in the financial situation expectation of household index, which decreased by 1.6 percent compared with the previous month, and the general economic situation expectation index fell 5 percent. Consumers were also concerned about unemployment, and that index dropped 6.3 percent.
But all of the indexes remained close to the 100-point level, which indicated an “optimistic outlook,” the statement said.
Turkish lira volatility and economic growth fears have rattled consumers, analysts said.
Renaissance Capital analyst Michael Harris said Friday in note that although the recent delay of an interest rate rise in the U.S. supported the Turkish lira, it still lost close to 10 percent of its value against the U.S. dollar since the beginning of the year.
“But the unemployment rate edged down to 10.4 percent in December from 10.6 percent a month earlier, and judging from the behavior of the absolute number of unemployed persons, which has also begun to come down, the worst on the unemployment front appears to have been left behind,” Atilla Yesilada, an economist with Global Source Partners in Istanbul, commented Monday before the index report was released.
But it takes time for changes in the unemployment picture to become perceptible to the general public, Yesilada noted.
Domestic demand is still slack, perhaps partially as a result of the lack of consumer confidence. The share of household final consumption expenditure in Gross Domestic Product was 71.2 in 2013 and this figure fell to 70.5 in 2014, and has not risen markedly since then.
It will also take some time for the reduction in energy expenditures, due to the low oil price, to reach the pockets of consumers, analysts pointed out.
A majority of analysts predicted an upturn in consumer confidence in the near future, particularly as revenue from tourism begins to increase in warmer weather.
