Turkish consumer confidence drops back near decade low

Consumer confidence in Turkey fell for a third-straight month in February, sliding back near the lowest in a decade, as expectations for household finances, the economy and unemployment deteriorated.

The official index of confidence dropped to 57.8 from 58.2 in January, the Turkish Statistical Institute said on Wednesday. It had reached 57.6 in October, the worst since the aftermath of the global financial crisis, after inflation hit a 15-year high.

The outlook of consumers has deteriorated since July, when the index stood at 72.7, even after the government took a swathe of measures including tax cuts to boost the economy and consumer demand. A political crisis with the United States, which peaked in August and sent the lira to a record low, tipped Turkey’s already overheating economy into an economic slump. Turmoil in the currency markets has helped keep inflation at more than 20 percent despite a recent lira rally.

Expectations among consumers for employment fell to 59 in February from 60 the previous month. The outlook for the general economic situation declined to 75 from 76.5, while expectations for household finances deteriorated to 75.2 from 77.1.

The only measure of the index to improve was the probability of saving, which rose to 22 in February from 18.3 in January. But this may not spell good news for the overall economy, which is contracting due to a slump in consumer spending.