The headline “trust has increased” sounds positive, but without a scale it is easy to draw the wrong conclusion. The July index did improve, but remains in the caution zone.
What changed in July
The consumer confidence index rose from 87.9 in June to 89.8 in July, an increase of 2.2%. The assessment of the current financial situation of households rose by 3%, and expectations of the general economic situation for the next 12 months by 5.2%.
Why 89.8 is not optimistic
The TÜİK methodology uses a scale from 0 to 200. A value above 100 corresponds to an optimistic mood, and below 100 to a pessimistic mood. Therefore, the data indicate an improvement in expectations, but not a transition of consumers to a confidently positive assessment of the economy.
What does this mean for business?
Improved expectations could support demand, but intention to spend on durable goods fell 0.8% in July. It's wise for companies and investors to look beyond the overall index to actual sales, credit costs and buying behavior. One month of rising sentiment does not yet form a stable trend.