Last Updated on 09/09/2022
The consumer confidence index in Turkey increased by 6.1% in August 2022
Recently, the increasing inflation rate in Turkey created some doubts for some people which relatively slow down the consumption expenditure in the country. However, recent data released by the Turkish Statistical Institute brought back an optimist estimation declaring the increase of the consumer confidence index in Turkey.
What is the consumer confidence index in Turkey?
The Consumer confidence index in Turkey is an indicator conducted by the official statistical institute to evaluate consumers’ optimism or pessimism about their anticipated financial status. This evaluation is based on people’s consumption behaviors.
How the consumer confidence index is set?
Based on responses on predicted financial status, attitude toward general economic situation, unemployment, and ability to save, the consumer confidence index in Turkey indicates future trends in households’ consumption and money saving. With their confidence in the economy’s future on the rise, consumers are less likely to save and more likely to spend money on significant purchases over the following 12 months
The consumer confidence index in Turkey increased in July 2022
According to the Turkish Statistical Institute data released on Thursday, the consumer confidence index in Turkey increased by 6.1% in August 2022. Thus, it became 72.2 after it was 68 in July 2022. Data shows that this indicator has been continuously increasing for the last 2 months after it was 63.4% in June of the same year.
Likewise, the construction confidence index increased by 1.5% from the previous month to 86.3 in August. Consequently, the economic confidence index, which stood at 93.4 in July and 94.3 in August, improved by 1.0%.
How does the CCI influence economic growth?
Demand in the Turkish economy is mostly driven by consumer confidence. People will purchase less if they are unsure of the future. In other words, when they feel financially insecure, they will prefer to save money for the unpredictable future rather than spend it. Thus, economic growth will slow down. However, people are more likely to consume when they have a high level of future confidence. As a result, GDP will grow as well. In fact, according to World Bank data, consumption expenditure constituted 68.5% of the GDP in Turkey in 2021.
How important is the CCI for investors
Investors and stock market experts should keep a close eye on the consumer confidence index in Turkey. They are attempting to predict whether consumer spending will rise or fall. In fact, any increase can encourage businesses to spend more to meet demand. And earnings and stock values rise as a result. For this reason, if the CCI increases, investors are more likely to purchase equities.
On the day the index is issued, the stock market has the potential to fluctuate significantly. Yet, this is more likely to happen when there is great economic uncertainty. Yet, we recommend foreign investors who still have doubts about the Turkish economic situation check if it is the right time to invest in Turkey. Check also this article to know if it is suitable to invest in real estate sector in Turkey.
How accurate is the consumer confidence index?
The statistical institute conducts monthly surveys with a varied range of demographic and socioeconomic information. It is generally based on data collected during the first 2 weeks of every month.
We can’t deny that the report’s regularity, huge sample size, and variety of data do help to increase its accuracy. Still, it can’t give exact information about the future of the economy like any survey-based study. However, it is helpful to track Consumption fluctuations as an economic indicator.
To conclude, the Turkish economy is very active with its various sectors. Therefore, it is an attractive object of study and analysis that reveals each time new challenging facts. For this reason, we highly recommend our customers willing to invest in Turkey evaluate wisely the Turkish economy trends as a first step. That’s why MEO Consultants experts provide them with a full-service advisory that they just have to request by getting risk-free initial consultation.
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