Turkey’s benchmark index of consumer confidence registered its biggest drop since May 2019.
The index fell to 80.2 points in April from 86.7 points in March, the Turkish Statistical Institute said on Thursday. That virtually wiped out all gains made this year – the index had stood at 80.1 in December.
Any reading below 100 points reflects pessimism.
Confidence among Turkey’s consumers declined after the government tightened lockdowns on the population this month after cases of COVID-19 reached a record high. The lira has also slid against major currencies, hurting spending power, since President Recep Tayyip Erdoğan sacked the governor of the central bank in mid-March.
The loss in consumer confidence was led by expectations for the general economic situation in the country. That sub index decreased to 82.9 points in April from 94.1 points the previous month. The outlook for household finances over the next 12 months also dropped sharply.
Former central bank governor Naci Ağbal raised interest rates to 19 percent from 10.25 percent during his four-month tenure to defend the lira and rein in inflation, which accelerated to 16.2 percent last month from 15.6 percent in February. That led to a sharp increase in the cost of consumer borrowing.