Turkey consumer confidence rises from record low; though reflects ongoing pain

Consumer confidence in Turkey rose from a record low in May as households became more optimistic about their finances and the general economic outlook; though the index still remains critically below 100 reflecting pessimism among the survey’s participants.

The benchmark index of confidence increased to 59.5 this month from 54.9 in April, the lowest level since records began in 2004, according to data published by the Turkish Statistical Institute. The index had stood at 69.5 in May last year.

Householders’ financial expectations for the next 12 months improved to 79.2 in May from 72.5 in April, the institute said. Expectations for the general economic outlook increased to 81.8 from 74.8. The outlook for employment rose to 55.3 in May from 53.8 a month ago and for the probability of saving also rose to 21.7 from 18.4, it said.

Turkey’s government has sought to limit the economic and financial impact of the COVID-19 outbreak on consumers by making it easier for them to repay debt and providing more financial aid to low income families and the unemployed. Yet, the outflow of portfolio investments from the emerging markets also hit the Turkish lira, adding to the pessimism among the survey participants.