The Turkish Statistical Institute (TÜİK – TürkStat) has presented the seasonally adjusted consumer confidence index for June 2020 as 62.6 points, an increase of 5.2% on the 59.5 points recorded in the previous month. The increase in the index is reflected by the expectation that Turkey will be continuing to relax its restrictions on the movement of the population. Many citizens have been unable to earn a living since the restrictions have been imposed over the last three months, and hope that their situation will improve has naturally resulted in an increase in confidence. This new resurgence of confidence had started in the previous month of May when an 8.5% increase was recorded.
The biggest increase in June 2020 was in the number of people unemployed expectation index which increased 12.2% to 62.1 points. Many people had become unemployed as a result of coronavirus, and there is now hope of employment increasing as the economy gets back to normal. Savings also continued to increase with a rise of 6.5%, following the increase of 18% in the previous month. Despite these increases, the probability of savings sub-index remains at ony 23.1 points due to the low propensity of the Turkish population towards savings in general.
The consumer confidence’s sub-indices were as follows :
- The probability of savings index increased by 6.5% to 23.1 points in June 2020 compared with the previous month.
- The general economic situation expectation index increased by 4.5% to 85.5 points in June 2020, compared with the previous month.
- The financial situation expectation of households index increased by 0.8% to 79.9 points in June 2020, compared with the previous month. .
- The number of people unemployed expectation index increased by 12.2% to 62.1 points in June 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.
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.