In March the index had fallen 6.44 percent month-on-month to 81.96 points, after falls in January and February.
The index, which was launched in December 2003, assesses consumers' spending behaviour and expectations, and the 100-point mark divides pessimism from optimism.
The index has only once fallen more sharply month-on-month - in June 2006 when it dropped 7.9 percent during a period of financial turbulence in Turkey, when the central bank was forced to raise interest rates sharply. With a background of rising inflation, the central bank hiked rates on Thursday for the first time since 2006.
Consumer confidence readings are going from bad to worse, as economic pressures continue to mount. There has evidently been a substantial decline in perceptions of the general economic situation.
Turkey's economic growth - which had been averaging 6.8 percent a year since a crisis in 2001 - has slowed down in the last year or so and full-year 2007 growth of 4.5 percent fell short of a 5.0 percent government target.
The government has lowered its 2008 gross domestic product growth forecast to 4.5 percent from an initial target of 5.5 percent, although the International Monetary Fund expects growth to come in at a lower 4.0 percent.
The statistics institute said the fall in the confidence index was related to a deterioration in consumers' expectations on purchasing power, the economic outlook and job opportunities in the coming period.
3 comments:
Please could you share your thoughts around the current exchange rate between the UK pound and the Turkish Lira and how you see it changing from this week until the end of 2008.
"Please could you share your thoughts around the current exchange rate between the UK pound and the Turkish Lira and how you see it changing from this week until the end of 2008."
I would love to, but I'm not sure what they are. My feeling is that the GBP is on its way down, especially if there is more monetary easing and as the property and credit crunch problem advances.
TRL is rather less likely to come down much. The decision on not banning AKP is a big plus, and the economy is slowing, but is hardly going to crash. Short term the Turkish central bank is unlikely to ease interest rates, and certainly not by much. So my guess is that the relation should change to the advantage of TRY, but it is only that, a guess.
I will be doing a rather longer analysis of the immediate Turkish outlook in about a week or so, so check back, and see if you can read anything from the tealeaves.
The issue is really how bad the UK problem is, and how this will affect GBP then any likely strong short term movements in TRY.
Do you think that Turkish Banks will suffer the same consequences as what has happened with the banks in the USA and across Europe. For example, how safe is HSBC Turkey with savers money?
In view of the bank rescue plan announced in the UK and interest rates being reduced by 0.5%, how do you see the English pound performing against the Turkish Lira from now on (e.g. the Turkish Lira looks to be weakening over the last few days - will this trend continue?)?
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