People hanker for the past financial conditions

THE CONSUMER CONFIDENCE index announced by the Turkish Statistical Institute (TurkStat) stayed unchanged in December at 80.1. This means:

“If the index is 100, we would know whether the consumer has an optimistic or pessimistic expectation regarding the economy because 100 is the optimistic-pessimistic limit. However, the consumer confidence index is below 100, showing that people are pessimistic. If the index exceeds 100, then we can talk about optimism. Hence, the current state as of December means that there has to be a 25% recovery to reach the optimistic limit.”

The consumer confidence index was revised in 2020: two of the four main items that constitute the index were changed. With this change, the index increased to 80, up from 60.

The consumer confidence index consists of an average of four sub-indices. These are the financial situation of households index currently and over the next 12 months, the general economic situation expectation and assessment of spending on durable goods. The first two indices, especially the first, are the most important.


TurkStat has been recording the consumer confidence index data set since 2012, so we have nine years of data.The financial situation of households index at present was 66.1 in December, the second-lowest in the last nine years. In July 2019, it was 65.8, rising slightly to 66.6 in November this year.

These levels and trends signal a deterioration in the financial expectations of households. For households to reach the optimistic limit of 100, they need a 50% recovery.

This appears impossible. When we look back at the data set, the index has never reached the 100 limit. Even when people were optimistic financially, the index increased to 87.7 at best.

The consumer confidence index is calculated based on surveys conducted over first half of each month. Hence, if businesses continue to remain closed due to the pandemic, this will eventually worsen the financial situation of households and further deteriorate the index.


The average financial expectation of households index over the next 12 months stands at 78.9. What’s interesting is that the difference between the index at present and over the next 12 months has widened as it has never before during November and December. It seems like people are still hopeful, or at least pretend that they are.

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