Apr 22 2019

Turkish consumer confidence remains weak, despite improvement in April

Turkey’s consumer confidence index in April showed a strong recovery at 63.5 percent, however the general index level however remains significantly below last year’s peak of 72.7,  Para Analiz website reported.

The index of confidence increased to 63.5 in April from 59.4 in March, registering a 6.9 percent recovery, it said.

While noting that the improvement in the general consumer confidence is positive and supports the claims that the Turkish economy could be bottoming out from last quarter’s sharp economic contraction, the website said a debate is necessary on the grounds of such improvement.

"The government’s aggressive pre-election spending, its artificial ways to keep the Turkish lira stable (swap operation) and the interest rates relatively lower (through uploaded external borrowing of the Treasury) appear as factors that are not sustainable for the remainder of the year,’’ it stressed.

A number of factors that are at play regarding sentiments in coming quarters include the ruling Justice and Development Party’s (AKP) announcement of cash injection to public banks, the fiscal deterioration staged in the first quarter of 2019 and the lira stability, Para Analiz said.

Turkey’s March 31 local elections and its backdrop has not served normalisation, the site said, noting that Turkish Treasury and Finance Minister Berat Albayrak’s long-awaited measures package will only continue to feeding scepticism on the future course of the Turkish economy.