23 January 2018•Update: 23 January 2018
By Tuba Sahin
ANKARA
Confidence in the Turkish economy has soared in January, the Turkish Statistical Institute (TurkStat) reported on Tuesday.
The consumer confidence index jumped 11.1 percent in January, to 72.3, from 65.1 in December, according to the report.
Official data showed that the downward trend in consumer confidence that started in August 2017 ceased in January 2018.
The probability-of-saving index saw the largest improvement among sub-indices, suggesting more and more people expected to save money. The sub-index surged almost 50 percent to 26.2 points.
Attitudes over the general economic outlook rose 9.7 percent, jumping from 87.5 to 96.1 points in January month-on-month.
Meanwhile, the expectation index for the number of people unemployed in the next 12 months, which is a gauge of the health of labor market, saw a 7.7 percent, or 5.4-point, advance.
In line with these increases, the financial situation expectation of household index also saw a rise of 7.3 percent, to reach 91.1 points.
KapitalFX analyst Enver Erkan told Anadolu Agency that confidence improved as Turkey's relations with its main strategic and economic partners, the U.S. and EU, were normalized.
"Especially October and November were very negative; amid the high tension in the relations between the U.S. and the EU," Erkan said.
Erkan added that decline in the volatility of Turkish lira also affected consumer confidence positively.
The dollar/Turkish lira rate saw its highest level at 3.9825, lowest level at 3.3845, while the average rate was 3.6762 in the last five months of 2017.
He highlighted that the higher economic growth rate expectation in 2017 and the trend in the decline of the unemployment rate also helped all sub-indices to rise.
"Better than expected macroeconomic indicators related to growth and labor proved these expectations," he said.
The unemployment rate in Turkey dropped to 10.3 percent in October, down 1.5 points from the same month previous year, TurkStat announced on Jan. 15.
The Turkish economy grew by 11.1 percent in third quarter of 2017, the fastest quarterly growth rate since 11.4 percent in the first quarter of 2011 according to TurkStat on Dec. 11.
Muammer Komurcuoglu, an economist at IS Investment, also said the strong January figure was a sign that consumption appetite would continue.
"Strong rebound in the probability of buying a new car, new home and healthy outlook in spending money on durable goods is promising," Komurcuoglu said.
