Turkey consumer confidence dips after flatlining in challenge for Erdoğan

Consumer confidence in Turkey dipped in February after flatlining the previous month, presenting a challenge to President Recep Tayyip Erdoğan, who is seeking to boost economic growth to 5 percent this year following a currency crisis.

Confidence among consumers fell to 57.3 points in February, from 58.8 the previous month, according to a monthly survey by the Turkish Statistical Institute. Any reading below 100 points reflects pessimism about the future.

The decline in confidence was spurred on by worsening expectations for household finances and unemployment, the figures showed.

Turkey’s government is dishing out cheap loans from state-run banks and pressuring the central bank to lower interest rates to help return the economy to the growth levels seen before the currency crisis struck in the summer of 2018. But unemployment remains stubbornly high at 13.3 percent and the lira has weakened to levels last seen in May as investors fretted about economic and monetary policy.

Expectations for household finances dropped to 76.8 points from 79.5. Sentiment concerning unemployment over the next 12 months declined to 53.8 from 56.8, the institute said.

Consumers are also concerned about the lira. It fell to as low as 6.1 per dollar on Thursday, continuing a sell-off this month beyond a psychological level of 6 per dollar. Turks have turned to foreign currency and gold since the currency crisis struck, pressuring the lira, which lost 28 percent of its value in 2018. Losses last year totalled 11 percent despite dollar selling by state-run banks.

Turkey consumer confidence
Source; Turkish Statistical Institute