Consumer confidence recovers; its the TL stupid!

Turkey’s February (seasonally adjusted) consumer confidence index increased by 1.5% mom in February compared to the previous month to 84.5 in February from 83.3 in January.

The recovery is seen across the board in the sub-sector categories and appears mostly related with the stop of the severe slide in the Turkish Lira and its 6% appreciation ytd.  Turkish consumers as evident from the piling of hard currency deposits are sensitive to the value of the TL as was the case with the past depreciation/appreciation episodes. The high rates might be hindering the consumers from spending using bank credit, yet the TL’s “strength” gives them a feeling of confidence in the economy.  The recovery of course does not bode well with the central bank’s efforts to trim domestic demand.

Seasonally adjusted consumer confidence index, February 2021

The financial situation of household index (present vs the past 12 months): up by 4.1% from 63.7 in January to 66.3 in February.

The financial situation expectation of household index (next 12 months) up by 0.8% from 83.8 in January to 84.5 in February.

The general economic situation expectation index (next 12 months) up by 4.0% to 88.2 in January from 91.7 in February.

Assessment on spending money on durable goods index (next 12 months vs past 12 months) up by 1.9% to 97.3 in January from 95.5 in February.