Mi­cro­scope, By Taptuk Emre Erkoç

Turkish Review - - CONTENTS - 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

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