The positive atmosphere that was caused by an increase in economic activity and loans during the summer seems to be fading away. Contrary to the positive increase in the September consumer confidence index that was announced by TURKSTAT, our figures point to a different situation.
At TurkiyeRaporu.com, we measure public perception of the economy in the second survey of every month. Within this framework, we ask the participants how they think the economy is as of today and how they think the economy will look like within a year from now. The rate of negative answers given to these questions were at 40% for a while, but a significant increase in negative views took place in September. While 44% of the participants thought that the economy was “Very bad”, 22.7% believes the economy is “bad” making the total rate of negative views 66%. The reason why this result is striking is that the same rate was 47% in August, which means that a 20 points increase took place in September.
In addition, when we asked the participants how they thought the economy would look like within a year from now, 52% responded as Much Worse/Worse, a 6 percentage point increase compared to August. So why did this happen?
There are several factors. The first one is the revival of economic and social life, which decreased significantly in the first months of the pandemic. As of June, although the revival of economic activity was not sufficient to fully recover the economy, it did have a small positive impact on the households. The second factor is the increase in the supply of consumer loans in the summer. As of today, the factors that kept the economic perception afloat seem to losing their effects. Considering the results we obtained this month, the economic effects of the Coronavirus pandemic were felt most deeply in September so far.
Contrary to the official consumer confidence index, our figures tell a different story than the positive 20-point increase announced by TURKSTAT. The reason is simple. The sub-indices regarding the number of expected unemployment and the possibility of saving, which are used in calculating the consumer confidence index were not taken into account in September. Considering the fact that these indexes have a negative effect on the consumer confidence index these days, not taking them into account resulted in a very serious increase in the positive direction.
In our August research we asked our participants whether they were worried about getting dismissed within the next 6 months. While 52% of the participants expressed that they currently have a job, 48% stated that they are not currently employed. Within that 52%, almost half of the participants stated that they were worried about getting dismissed in the next six months. This proves our point that expected unemployment is currently high, which if included would have a negative impact on the overall consumer confidence index.
The results of our research are an aggregate of what you feel and hear in everyday life. Undoubtedly, the economic situation will have reflections on politics. It is difficult to say anything about the effect of voting rates, but it is possible to foresee that the language of politics will become harsher in the upcoming days.