The Turkish Statistical Institute (TÜİK – TürkStat) has presented the seasonally adjusted consumer confidence index for August 2020 as 60.9 points, a decrease of 2.2% on the 60.9 points recorded in the previous month.
Among the sub-indices, despite small decreases in the other sub-indices, there was a surprising significant increase of 8.8% in the probability of savings sub-index. It is difficult to find a reason to justify such an increase in light of the continuing economic recession in Turkey. However, the savings sub-index of 21.7% reflects the very low propensity of the Turkish population towards savings in general, and so an increase of 8.8% even does not carry much weight in terms of behaviour trend.
The consumer confidence’s sub-indices were as follows :
- The probability of savings index increased by 8.8% to 21.7 points in August 2020 compared with the previous month.
- The general economic situation expectation index decreased by 3.3% to 79.5 points in August 2020, compared with the previous month.
- The financial situation expectation of households index decreased by 3.5% to 77.8 points in August 2020, compared with the previous month. .
- The number of people unemployed expectation index decreased by 2.5% to 59.5 points in August 2020, compared with the previous month.
The above indices reflect expectations over the next 12 months.
Turkey’s seasonally adjusted consumer confidence index fell from 72 points in January 2018 to 58.7 points in December 2018. During 2019, the index remained comparatively steady, with the highest figure being 63.5 points in April 2019 and the lowest figure being 55.3 in May 2019. In December 2019 the index was 58.8 points. The index has so far changed very little in 2020.
In Turkey, the Consumer Confidence Index survey aims to measure present situation assessments and future period expectations of consumers' on personal financial standing and general economic course and to determine consumers' expenditure and saving tendencies in the near future. The survey covers a randomly selected sample of all individuals at the age of 15 and above having a job in urban and rural areas. The index is evaluated between 0 and 200. The reading above 100 means consumers are optimistic and below 100 are pessimistic.
The current level of confidence reflects a pessimistic outlook by consumers and would need to rise above 100 to indicate optimism. The index is considered an important gauge of the overall health of the economy in that it assesses the confidence of people to spend money, which in turn is an indication of the vitality of the economy.