Turkish consumer confidence plunges to lowest level on record

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Photo by M. B. M. (Unsplash)

Turkey’s consumer confidence dropped to the lowest level on record in May, dampening hopes for a sustainable economic recovery in the country, the Ahval news website reported on Tuesday.

The confidence index fell to 55.3 points this month from 63.5 points in April, the Turkish Statistical Institute (TurkStat) said on its website on Tuesday, the lowest level since records began to be kept 15 years ago.

Consumer confidence in Turkey is now lower than it was at the height of a currency crisis last year and during the global financial crisis of 2008. Sentiment worsened after the lira dropped by almost 13 percent against the dollar this year, curtailing spending power. It had lost almost one-third of its value in 2018.

Any reading for the index below 100 indicates pessimism about the future.

A sub-index tracking the probability of saving fell to 20.8 points in May from 26 points in April. Expectations for households’ financial situation worsened to 73.9 from 82.2, while expectations for the general economic situation dropped to 70.1 from 82.4, the institute reported.

Turkey’s economy contracted on a quarterly basis for two straight quarters in the second half of last year, heralding a technical recession. While most economists are predicting that quarterly economic growth was probably positive in the first three months of this year, they are warning that Turkey now faces a so-called double-dip recession.

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