Turkey’s Consumer Confidence Hits Three-Month Low in October

Bloomberg – Turkey’s consumer confidence weakened slightly in October, marking its lowest level in three months, according to data released by the Turkish Statistical Institute (TÜİK) and the Central Bank of the Republic of Turkey (CBRT). The consumer confidence index fell by 0.3% month-on-month, sliding from 83.9 in September to 83.6 in October, signaling cautious household sentiment amid ongoing inflationary pressures and economic uncertainty.

Confidence Slips Amid Weak Household Outlook

The consumer confidence index, derived from the consumer tendency survey, reflects how households perceive their financial situation and the broader economic outlook. October’s decline, though modest, underscores that optimism among Turkish consumers remains fragile, with sentiment still well below the neutral threshold of 100 — the level that separates optimism from pessimism.

The subindex measuring current financial conditions of households dropped slightly from 67.8 to 67.7, suggesting limited improvement in purchasing power despite wage hikes and easing inflation trends. Meanwhile, the expectation for household financial conditions over the next 12 months held steady at 84.2, showing that consumers remain cautiously hopeful but far from confident about their future income prospects.

Diverging Views on the Economy and Spending

Interestingly, not all components of the survey showed decline. The index measuring expectations for the general economic situation over the next 12 months rose to 87.6, hinting that consumers see potential stabilization on the macroeconomic front as the Central Bank continues its cautious monetary easing. However, this optimism has yet to translate into stronger spending intentions.

The index gauging consumers’ readiness to spend on durable goods — such as electronics, furniture, or household appliances — fell from 105.7 to 104, reflecting households’ reluctance to commit to major purchases. Economists interpret this as a sign that consumers are prioritizing essential expenses amid uncertainty over inflation and interest rate movements.

Outlook: Lingering Uncertainty Ahead

Although the decline in consumer confidence was slight, analysts warn that the stagnation in sentiment could persist through the final quarter of 2025. Inflation remains elevated, eroding purchasing power, while high borrowing costs continue to weigh on consumer spending and credit demand.

The 83.6 reading represents the weakest confidence level since July and aligns with other indicators showing sluggish momentum in domestic demand. With the Central Bank expected to slow its pace of rate cuts and the government focusing on fiscal restraint, the recovery in household sentiment may depend heavily on inflation moderation and wage adjustments in early 2026.

Economists note that while the improved outlook for the general economy suggests progress in stabilization efforts, the persistent weakness in household financial perception points to an uneven recovery — one where macro indicators improve faster than consumers’ lived reality.