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Türkiye’s consumer confidence index fell 1.8% month on month in December to 83.5, data released Friday by the Turkish Statistical Institute showed.
The index, calculated from the Consumer Tendency Survey conducted jointly by TurkStat and the Central Bank of the Republic of Türkiye, declined from 85 in November.
The sub-index measuring households’ current financial situation fell 2.4% to 67.9 in December, down from 69.6 the previous month.
Expectations for households’ financial situation over the next 12 months edged down 0.6% to 85.2, compared with 85.7 in November.
The index tracking expectations for the general economic situation over the next 12 months declined 1.8% to 78.2 from 79.6.
Expectations for spending on durable consumer goods over the next 12 months also weakened, falling 2.3% to 102.6 from 105.
The data came a day after the Turkish central bank lowered its benchmark policy rate by 150 basis points, in line with market expectations.
The one-week repo rate was cut to 38% from 39.5%, matching the median estimate of an Anadolu Agency survey.
In its statement, the central bank said consumer inflation in November came in below expectations due to a sharper-than-anticipated decline in food prices. It added that, following an increase in September, the underlying trend of inflation eased slightly in October and November.
“Quarterly GDP growth turned out higher than projected in the third quarter,” the bank said, noting that leading indicators for the final quarter suggest demand conditions continue to support the disinflation process.
However, the bank warned that inflation expectations and pricing behavior still pose risks.
“While showing signs of improvement, inflation expectations and pricing behavior continue to pose risks to the disinflation process,” it said.
The central bank reiterated that it will maintain a tight monetary stance until price stability is achieved and will set policy in line with its disinflation path.
“The Monetary Policy Committee will make its policy decisions so as to create the monetary and financial conditions necessary to reach the 5% inflation target in the medium term,” it said.
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Türkiye’s annual inflation rate eased to a four-year low of 31.07% in November from 32.87% in October, below market expectations.
Since May 2023, the central bank raised the policy rate from 8.5% to 50% before holding it steady until December 2024, when it began an easing cycle. Rates were lowered in December, January and March to 42.5%, briefly raised in April to 46%, held in June, and then cut again in subsequent meetings to 39.5% before the latest reduction.
Separately, Moody’s said Türkiye’s economy is expected to grow 3.2% this year, 3.4% next year and 3.5% in 2027, according to its Global Structured Finance Outlook 2026 report.
The ratings agency forecast inflation at about 35% this year, with a margin of plus or minus 2%, before easing to 22% next year and 18.5% in 2027.
Moody’s also projected growth of 2% for the United States in 2025, 1.8% in 2026 and 1.9% in 2027, while the eurozone is expected to expand 1.1% this year, 1.3% next year and 1.4% in 2027. China’s economy is forecast to grow 5% in 2025, slowing to 4.2% by 2027, while India’s growth is projected at around 7% in 2025 before moderating.
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