Turkish consumer confidence climbs after statistical overhaul

Consumer confidence in Turkey improved in September after a revision to calculations that stripped out prospects for employment and the propensity to save.

The benchmark index of confidence rose to 82 this month from 79.4 in August, the Turkish Statistical Institute reported on Tuesday. Any reading below 100 reflects pessimism about the future.

Consumer confidence in Turkey had stood at 59.6 in August under the previous method of calculation. The propensity for saving was calculated at 21.7 and the outlook for employment at 59.5.

The outlook for spending on durable goods, a new addition to the index, registered the highest reading in September of 93.8, increasing from 92.6 in August. Sub-indexes calculating the financial situation of householders, also a new component, householders’ future expectations and the outlook for the economy all rose.

The statistical institute said the revisions to the index were made on the recommendation of the European Commission and to ensure international comparability.

Turkey’s economy is in a fragile recovery from a severe downturn caused by the coronavirus pandemic and exacerbated by the fallout of a currency crisis in 2018. The lira has slumped to a record low against the dollar this week, partly due to Turks exchanging their lira savings for foreign currency.

The government has introduced a ban on companies firing workers during the pandemic, helping to limit an increase in official unemployment. But the number of people not seeking a job or in education has surged after millions were put on unpaid leave and short-working weeks.

The lira dropped 0.4 percent to 7.66 per dollar on Tuesday, extending the record low.