Microscope, By Taptuk Emre Erkoç
Macroeconomic growth rates with positive values amount to an optimistic trend in any given economy. The increase in the total amount of output within an economy sends hopeful signals to the actors who have a role in the sustainability of those figures. However, consolidation of macroeconomic institutions and their functioning structures need enduring confidence among microeconomic players such as consumers, entrepreneurs and non-state organizations Last issue, Microscope started to scrutinize the role of these actors, starting with the non-state organizations. In this particular piece, it examines recent statistics in relation to consumers’ choices, including the consumer price index (CPI), the consumer confidence index (CCI) and computer and Internet usage in Turkey.
Consumers make up the backbone of any economic system, so their decisions are not only highly interconnected with microeconomic institutions, but also have an impact on macroeconomic indicators such as the CPI. In this regard, we must recall the fact that the CPI is the consumeroriented inflation rate and is interwoven with other macroeconomic indicators such as interest and exchange rates. The Turkish Statistical Institute’s (TurkStat) recent releases on this particular index, as shown in Figure 1, have a number of conclusions for the Turkish economy.
Firstly, the upward trends during the summer and the beginning of the school term -- even though seasonal products are excluded from the basket -suggest that seasonal variation is still very relevant. Secondly, the influences of energy and unprocessed food products are almost the same. Thirdly, seasonal products seem to be related to the surge in the prices throughout the spring, as shown by the change in the index. Last but not least, the value of the index gets closer to zero during the last months of 2014, implying that the overall price level is becoming stabilized.
Another significant indicator of the overall consumer relationship with the economy is the CCI, which gives an idea about the extent to which consumers feel safe vis-à-vis the current outlook of market dynamics. Figure 2 provides a summary of this confidence level throughout 2014.
The CCI started at 73 and ended at 67; a 6 percentage point decrease over the year. Moreover, the index was at its highest value in April, after the local elections in March; it could be argued that the temporary
CONSUMERS’ DECISIONS ARE HIGHLY INTERCONNECTED WITH MICROECONOMIC INSTITUTIONS AND HAVE AN IMPACT ON MACROECONOMIC INDICATORS