Consumer Confidence in Türkiye Stuck Below 100 Mark

The Consumer Confidence Index (CCI) in Türkiye recorded a modest rise in August 2025, climbing by 0.9% month-on-month to reach 84.3, according to official data released jointly by the Turkish Statistical Institute (TÜİK) and the Central Bank of the Republic of Türkiye (CBRT). While the increase suggests a slight improvement in consumer sentiment compared with July, the index remains well below the neutral threshold of 100, underscoring the ongoing sense of pessimism among households.

This report provides a closer look at the details behind the latest data, the performance of sub-indicators, and the broader implications for Türkiye’s economy.

A Modest Rise in the Headline Index

In July, the index stood at 83.5. By August, it rose to 84.3, marking a limited recovery but not enough to shift the overall narrative. Consumer confidence indices are generally interpreted with 100 as the neutral baseline: values below 100 indicate pessimism, while values above 100 reflect optimism.

Thus, despite the month-on-month gain, the August figure still points to a climate where consumers remain cautious about their financial well-being and the future of the economy.

Sub-Indices: Mixed Signals from Households

A deeper look into the sub-components of the index reveals a divergence between current perceptions and future expectations.

1. Household Financial Situation – Current:

   • Rose from 68.2 in July to 70.0 in August.

   • This 2.6% increase indicates that households feel their present financial situation has slightly improved, possibly due to seasonal effects, wage adjustments, or short-term easing in price pressures.

2. Spending Intentions on Durable Goods – Next 12 Months:

   • Increased from 102.3 to 104.8.

   • This 2.5% jump shows a stronger willingness among households to spend on long-term items such as appliances, cars, or furniture. This uptick is important as durable goods demand is a key driver of domestic consumption and industrial production.

3. Household Financial Expectations – Next 12 Months:

   • Declined from 84.6 to 83.8, a 0.9% fall.

   • The decline suggests that despite modest improvements in their current situation, households remain worried about their financial outlook over the coming year. Concerns may stem from inflationary pressures, rising living costs, and uncertainties about income growth.

4. General Economic Outlook – Next 12 Months:

   • Fell from 79.0 to 78.4, a 0.7% decline.

   • This points to skepticism about macroeconomic stability, reflecting public concerns over factors such as inflation, unemployment, exchange rate volatility, and global economic headwinds.

What the Numbers Tell Us

The contrast between rising present confidence and weakening future expectations highlights a broader challenge for policymakers. On the one hand, short-term conditions have eased slightly, leading to small improvements in daily financial sentiment. On the other, long-term structural uncertainties continue to weigh heavily on households.

This split signals that while consumers may feel marginally better today, they are not convinced that the positive trend will last. Such hesitation can impact spending patterns, with households postponing major financial commitments out of caution, despite short-term gains in disposable income.

Regional and Global Comparisons

Türkiye’s consumer confidence index at 84.3 is still significantly below both the Eurozone average (close to 100) and levels recorded in many emerging economies. For instance, European Union surveys regularly show average confidence scores above 95–100, with Northern and Western European countries recording some of the strongest consumer sentiment globally.

By contrast, Türkiye’s persistent placement below the neutral threshold highlights ongoing structural weaknesses such as:

• Persistent high inflation, which erodes purchasing power.

• Exchange rate volatility, which impacts household savings and import-dependent goods.

• A sense of economic uncertainty, linked to both domestic factors and global risks.

Why Durable Goods Spending Matters

One notable bright spot in the August data is the increase in intentions to buy durable goods. Since these items require substantial financial commitment, a rise in this indicator often signals that consumers have more short-term confidence in their incomes.

If realized, stronger durable goods demand could boost industrial output, support retail trade, and provide short-term relief for the domestic economy. However, the simultaneous decline in expectations about the broader economy raises the question of whether this demand is sustainable over the long term.

Implications for Policymakers

For the CBRT and government policymakers, the data is a mixed bag:

• Positive side: Slight gains in present conditions and spending intentions may suggest that monetary and fiscal adjustments are having some stabilizing effect.

• Negative side: The decline in forward-looking expectations signals that consumers remain unconvinced about the government’s ability to deliver long-term stability.

Unless inflation is firmly brought under control and the cost-of-living outlook improves, consumer confidence is likely to remain stuck below the neutral 100 level.

The August 2025 Consumer Confidence Index paints a picture of cautious optimism in the short term, but persistent pessimism for the future. Households recognize slight improvements in their current financial situation, yet they remain skeptical about what lies ahead.

This duality reflects the broader reality of Türkiye’s economy: short-term resilience in spending but long-term concerns about inflation, stability, and income growth. For sustainable recovery in confidence, policymakers will need to build a stronger sense of predictability and trust in the economic outlook.