Turkish consumer confidence plunged the most since President Recep Tayyip Erdogan came to power almost 20 years ago, as a pivot toward more mainstream economic policies takes its toll on household finances.
(Bloomberg) — Turkish consumer confidence plunged the most since President Recep Tayyip Erdogan came to power almost 20 years ago, as a pivot toward more mainstream economic policies takes its toll on household finances.
The consumer confidence index plummeted to 68 points in August from 80.1 a month earlier, according to the Turkish Statistical Institute. That’s the biggest drop since records began in 2004, months after Erdogan first became prime minster.
The precipitous slump follows a series of tax hikes, several increases in interest rates and a sharp upward revision in official inflation expectations for the year. The central bank’s new governor, Hafize Gaye Erkan, and Treasury and Finance Minister Mehmet Simsek are orchestrating a return to orthodox policy after years of growth-at-all-costs measures.
Expectations for household finances and the national economy in the coming 12 months also saw record declines. The statistics office adjusted its methodology for the data in 2012.
Erdogan had boosted consumers’ disposable income with public spending ahead of national elections in May. His next test at the ballot box will come during local elections in March 2024.
–With assistance from Tugce Ozsoy.
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