Consumer confidence rises in March

Consumer confidence rises in March

Consumer confidence rises in March

Consumers’ confidence in the economy surged in March, the Turkish Statistics Institute (TÜİK) announced on March 21.

On a monthly basis, the consumer confidence index climbed 2.7 percent to stand at 59.4 this month.

The index value is jointly calculated by TÜİK and the Central Bank through measurement of consumer tendencies.

Last month, the figure was 57.8, down 0.7 percent from 58.2 in January.

In 2018, the index value hovered between 72.7 and 57.6 - the highest posted in July and the lowest in October.

On nearly 20 economic and financial criteria, consumers’ assessments and expectations for the next 12 months are measured in monthly tendency surveys.

The index is calculated from the survey results on a range of 0-200, with above 100 indicating an optimistic outlook, and below 100 a pessimistic outlook.

“The general economic situation expectation index, which was 75 in February, increased by 4.9 percent to 78.6 in March,” TÜİK said.

This month, the index for consumer expectations of a better financial situation stood at 78.3, up from 75.2 in February.

“The number of people unemployed expectation index - 59 in February – decreased by 0.1 percent to 58.9 in March,” the institute said.

Consumers’ tendency to save money for the next 12-month period also showed almost no change - 22 in March versus 22.02 in February.

“The Turkish economy’s strong performance will continue to surprise people,” Treasury and Finance Minister Berat Albayrak said on March 21.

He noted that the data pertaining to house sales suggest a strong recovery as of March.

“Interest rates on housing loans have eased to 1.28 percent. I believe the rates will decline below 1 percent around May,” Albayrak said.

Meanwhile, the government has extended the deadline for tax cuts on housing, automotive, and furniture, in a move aiming to further boost consumption, according to the Official Gazette on March 21.

Tax cuts on cars, commercial vehicles and home appliances were extended until June 30, while those on furniture, housing and title deed fees will remain in effect until Dec. 31.

Previously, the tax cuts on all these items were due to end on March 31.

Separately, the withholding tax on foreign currency time deposits of between six months and one year was raised to 20 percent from 16 percent, the gazette showed.

The withholding tax on foreign currency time deposits of more than a year was raised to 18 percent, from 13 percent.

The total forex held by individuals and institutions in Turkey hit a record high last week.

Foreign currency deposits in Turkey’s banking sector account for more than 50 percent of all deposits.

The authorities also set the withholding tax on interest from bonds issued abroad by legally obligated institutions at 7 percent for bonds with a maturity of up to one year, 3 percent for a maturity between one and three years and zero percent with a maturity of more than three years, according to the gazette.