Turkey’s Consumer Confidence Rises Slightly in May, But Expectations Weaken Sharply

The Turkish Consumer Confidence Index showed a slight improvement in May, but signs of weakening expectations and rising inflationary sentiment continue to dominate the broader outlook.

Official Index Ticks Up, Reaches 10-Month High

According to data from the Turkish Statistical Institute (TÜİK), the Consumer Confidence Index (TGE) rose by 0.3% month-on-month in May, reaching 80.5, its highest level in ten months. The uptick was driven by improvements in two key subcomponents: expectations for the general economic outlook over the next 12 months and household financial expectations.

Despite this positive signal, the overall confidence level remains well below the neutral threshold of 100, reflecting persistent fragility in consumer sentiment.

Bloomberg HT Data Shows Divergence: Confidence Down, Consumption Up

Separately, Bloomberg HT’s Preliminary Consumer Confidence Index for May declined by 1.81% compared to the final index of the previous month, falling to 70.90. The breakdown reveals a troubling shift: consumers’ perceptions of current conditions and future expectations both deteriorated, even as willingness to spend increased.

This paradox—rising consumption amid falling confidence—is seen as a consequence of rising inflation expectations and growing concerns over the erosion of purchasing power.

Bloomberg HT’s Consumer Expectations Index dropped by a steep 9.04% to 69.09, reflecting deepening anxiety over the economic outlook. On the other hand, the Consumption Tendency Index, which measures perceived suitability for purchasing durable goods, cars, or housing, rose by 8.06% to 79.59. Analysts interpret this rise as a possible sign that consumers are bringing forward big-ticket purchases in anticipation of future price increases—a classic inflationary behavior.

Mixed Picture from Sub-Indices

Sub-index data from TÜİK also reveal a fragmented picture. While some metrics such as household financial outlook posted marginal gains, others like durable goods purchasing intent continued to lag. The survey shows that consumers remain hesitant when it comes to large expenditures, even if their broader expectations have slightly improved.

Political Uncertainty and Global Tensions Weigh Heavily

Analysts cite both domestic political developments and mounting global trade tensions as contributing to the prevailing uncertainty. The slowdown signals in Turkey’s growth trajectory, amplified by these external and internal dynamics, appear to be feeding into consumer pessimism—particularly when it comes to future expectations.

Conclusion: Consumption Up, Confidence Down—An Uneasy Balance

May’s consumer data paints a conflicting economic narrative. While TÜİK’s headline index indicates a modest recovery in sentiment, Bloomberg HT’s forward-looking components suggest rising caution. The increase in consumption tendency, though seemingly positive, may actually be a sign of distress rather than confidence, as consumers brace for further price hikes.

With inflation pressures mounting and political uncertainty still looming, the Turkish consumer’s outlook remains fragile—even if headline figures temporarily tick up.

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