Last Updated on 23/11/2022
Turkey’s Consumer Confidence index hits its highest level in November 2022
Recently, Turkey’s rising inflation rate gave some individuals cause for concern, which slowed down the citizens’ consumption spending somehow. However, recent data made public by the Turkish Statistical Institute have led to an optimistic prediction of an improvement in Turkey’s consumer confidence index.
What is Turkey’s consumer confidence index?
Turkey’s consumer confidence index is an indicator that the national statistical institute of Turkey uses to measure consumers’ optimism or pessimism over their expected financial situation. Therefore, it is based on people’s consuming habits as the foundation of this judgment.
The index serves as a crucial barometer of the economy’s acting as a whole, providing insight into how people feel about their financial condition, the state of the economy as a whole, as well as their spending and saving habits.
The setting of the CCI
The consumer confidence index in Turkey forecasts future trends in household spending and financial saving based on responses to questions on expected financial status. It also tracks attitudes toward the general economic situation, unemployment, and ability to save. Consumers are less inclined to conserve money and more likely to spend it on large purchases over the coming year as their trust in the economy is rising.
The highest level in a year
According to the most recent official data made public on Tuesday, Turkey’s consumer confidence index increased for the fifth straight month in November 2022, reaching its highest level in just over a year.
The Turkish Statistical Institute (TurkStat) released that the consumer confidence index increased to 76.6 this month, up 0.6% from 76.2 in October.
The sub-indices for general economic condition forecasts over the following 12 months and the current financial situation of households, which increased by 3.4% and 1.5%, respectively, from a month ago, were the main contributors to November’s growth.
On the other hand, the index for estimating spending on durable goods over the following year fell by 1.2%, and families’ expectations for their financial status over that time reduced by 0.5% in November.
Turkey’s consumer confidence index impact on economic growth
The main force behind demand in the Turkish economy is consumer confidence. To explain, if people are uncertain about the future, they will spend less. In other words, individuals will choose to conserve money rather than spend it when they feel anxious about their financial situation. As a result, economic development will be slower. However, when people have high optimism for the future, they are more inclined to consume. Consequently, GDP will increase.
In fact, GDP in Turkey with chain linked volume index (2009=100) increased by 7.6% in the second quarter of 2022 compared to the same period in 2021 reaching 3 trillion 418 billion 967 million TRY.
CCI in Turkey an incentive for foreign investment
Investors and stock market analysts should closely monitor Turkey’s consumer confidence index. It helps to forecast whether consumer spending will increase or decrease. Therefore, any rise may motivate companies to raise spending in order to keep up with demand. And as a result, earnings and stock prices increase. Consequently, investors are more likely to buy stocks if the CCI rises.
From the same point of view, we advise international investors who are still unsure of Turkey’s economic circumstances to find out if now is the ideal moment to make an investment. We invite them to read this article to be sure that investing in Turkey is a good idea.
To sum up, the diverse categories of the Turkish economy make it incredibly dynamic. As a result, this makes it an interesting subject for research and analysis that consistently exposes startling new discoveries. Thus, we strongly advise anyone looking to invest in Turkey to first carefully consider the direction of the Turkish economy. As a result, they can request full-service support from MEO Consultants professionals by scheduling a free initial consultation.
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