According to official data released on Thursday, Turkey’s monthly consumer confidence index was lower in September in comparison to previous months.
A report published by the Turkish Statistical Institute (TurkStat) illustrated that the index decreased from 71.1 percent in August to 68.7 in September – a total decrease of 3.4 percent.
The confidence index is perceived as a vital gauge of the overall health of the economy, indicating the public’s sentiment about sending money, which in turn gives clues about economic vitality.
All sub-indices of the main index were also lower in September. The probability of saving index, which indicates the expectation of earning enough money to save, showed the sharpest decline as it decreased from 22.4 percent in August to 20.2 in September – down by 10 percent.
The number of people unemployed expectation index, a reflection of sentiment about the health of the labor market, was down by 2.7 percent and stood at 70.5 in the previous month.
Turkey’s financial situation expectation of household index was the least-hit figure in September, decreasing 2.5 percent to reach 89.6 percent.
TurkStat also reported that Turkey’s consumer confidence index started 2017 at 66.9 percent in January and hit its highest level with 72.8 in May.
Amid the confidence index, Economic Minister Nihat Zeybekci emphasized that Turkey is expected to end 2017 in the top three world economies.
After expanding by 3.2 percent in 2016, the Turkish economy posted a 5.2 and 5.1 percent growth in the first and second quarters of 2017 according to TurkStat.
Praising this progress, at the World Business Summit in New York, which was organized by MUSIAD USA, Zeybekci stated that “despite the coup attempt last year, the ring of fire in Syria and Iraq, and economic difficulties with Russia, we had an economy that expanded by 3.2 percent in 2016.”
“Our growth rate in the third quarter can put us at number 1 in the world. We can come in second place in the world for the fourth growth quarter. Even third place is not a bad performance for us,” the Economic Minister added.
Zeybekci further added that “almost half of Turkey’s growth in the second quarter was a result of exports and production. This is the growth style that we want to see, and we want to ensure its sustainability for 2018, 2019 and 2020.”
Turkey’s growth rate surpassed perennial heavyweights including the US, UK and Germany in the second quarter, which posted 2.2 percent, 1.7 percent and 2.1 percent year-over-year growth rates respectively according to data obtained from the Organization for Economic Cooperation and Development.
The US economy after FOMC decision
As the year comes to an end, the US Central Bank has decided to hold interest rates steady the Federal Open Market Committee (FOMC) announced on Wednesday.
After the conclusion of its two-day meeting, the FOMC voted unanimously to maintain its interest rates at 1.00-1.25 percent.
A statement by the FOMC stated that “job gains have remained solid in recent months, and the unemployment rate has stayed low.”
The unemployment rate fell to 4.3 percent in July, its lowest level in 16 years. However, inflation remains below the Federal Reserve’s target of 2 percent.
According to the Labor Department, the Consumer Price Index – a major measure of consumer inflation in the US economy – rose 0.4 percent in August, or 1.9 percent year-on-year.
The FOMC added that it expects inflation to reach 2 percent in the medium term.
In spite of the recent hurricanes Harvey and Irma, which has caused a deep social and financial burden on the state, the FOMC stated that “storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term.”
The FOMC has two meetings left this year. While analysts do not expect a rate hike in November, they believe the Fed may increase rates the following month.