Turkish Consumer Confidence Falls to Lowest Level Since 2009

Turkish consumer confidence index fell to the lowest in six years as slowing economic activity weighs on sentiment.

Turkey’s state statistics institute reported today in Ankara that the index fell to 64.4 in March from 68.1 last month, missing the median estimate of 68.5 in a Bloomberg survey.

The percentage of people who expect unemployment to rise over the next year reached the highest level since Feb. 2009, while the prospect of making savings also worsened. Deteriorating sentiment partly explains persistent government pressure on monetary policy makers to ease access to credit and spur growth, said Timothy Ash, chief emerging-market economist at Standard Bank Plc in London

It’s a “big drop and underlines that the economy is struggling to get traction,” Ash said by e-mail. The government’s pressure on the central bank had “actually backfired as it delivered market volatility,” he said.

Annual growth in Turkey’s gross domestic product dropped to 1.7 percent during the third quarter of last year compared with 4.1 percent in 2013. The slowdown was driven by domestic demand, which remained weak since the Turkish central bank more than doubled its main interest rate in January last year to bolster the lira.

The currency extended losses after the consumer confidence report and was trading 0.6 percent lower at 2.5896 per dollar at 10:36 a.m. in Istanbul.

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