Turkey: Consumer sentiment deteriorates in August

The consumer confidence index published by the Statistical Institute in cooperation with the Central Bank fell to 77.2 points in August, down from 78.5 points in July - which had marked the highest level since March 2012. Consequently, consumer confidence remains firmly entrenched below the 100-point threshold that separates optimistic from pessimistic territory.

According to the Statistical Institute, the deterioration was mainly due to a sharp drop in consumers' probability of saving in the next 12 months and their expectations regarding the economic situation in the next 12 months. Consumers' assessment of their financial situation in the next 12 months decreased more mildly. On the other hand, sentiment regarding Job job prospects gained ground over the previous month.

Consumer confidence levels remain low overall, which does not bode well for private consumption going forward. FocusEconomics Consensus Forecast panellists see private consumption expanding 2.9% this year, which is down 0.2 percentage points from last month's forecast. For 2014, the panel expects private consumption to grow 3.8%.