Turkish consumer confidence posts sharpest decline in 9 months during April: TurkStat

Türkiye’s consumer confidence index recorded its steepest decline since July 2024, falling by 2 points to 83.9 in April, according to data released by the Turkish Statistical Institute (TurkStat) on Tuesday.

The index, jointly calculated by TurkStat and the Central Bank of the Republic of Türkiye (CBRT), reflects consumers’ overall outlook on economic expectations and spending intentions based on survey responses and can range from 0 to 200—values above 100 indicate optimism, while readings below 100 signal a pessimistic sentiment.

The index component measuring households’ current financial status declined by 2.5%, from 70.9 in March to 69.1 in April. Expectations regarding household financial conditions over the next 12 months also slightly weakened, with the corresponding index falling by 0.5% to 84.3 from 84.7 last month.

Similarly, the index measuring expectations for the general economic situation over the next year dropped by 2.2%, from 84.6 in March to 82.8 in April.

Spending intentions on durable goods also showed a notable pullback. The index for consumers’ likelihood of purchasing high-value items such as furniture or electronics over the next 12 months declined by 3.8%, falling from 103.2 in March to 99.3 in April.

These figures support the Turkish central bank’s pledges to sustain disinflation, which extended its downward trend to a tenth consecutive month in March, with annual inflation easing to 38.1%. However, the nation’s monetary policymaker raised interest rates by 350 basis points to 46% in its latest meeting on April 17, following three consecutive rate cuts of 250 basis points that had brought the rate down to 42.5%. The Monetary Policy Committee cited reignited inflationary pressures amid rising global uncertainties, emphasizing the persistence of strong domestic demand, which needs to be contained.

The decline in spending supports the central bank’s disinflation strategy, which is expected to help bring inflation down further in the coming months.

Confidence in Turkish financial services edges up

Despite the overall dip in consumer sentiment, confidence within the financial services sector improved notably. The Financial Services Confidence Index (FHGE) rose by 7.4 points to 177.7 in April, marking a strong recovery from the previous month.

The index, derived from a weighted and aggregated survey of 148 financial institutions, was positively influenced by all its sub-components. These include assessments of business conditions over the past three months, recent demand for financial services, and expectations for service demand in the coming three months.

Although evaluations of profitability over the past three months showed a more subdued upward trend compared to the previous period, expectations for profitability in the upcoming quarter became more optimistic, indicating improved sentiment within the sector.

The Financial Services Confidence Index (FHGE) measures sentiment within Türkiye’s financial sector and is based on a monthly survey of institutions operating in the industry. The index ranges from 0 to 200.

A reading above 100 signals optimism among financial institutions, while a value below 100 reflects a negative outlook.