A let’s wait and see week

last week with important political WE CONCLUDED and economic developments, such as the interest rate decision of Monetary Policy Committee Meeting, President Erdogan’s visit to the UAE, Russia-Ukraine tension, the consumer confidence index, housing sales data, and TurkStat’s life satisfaction survey.

I think one of them deserves more attention than it has gotten.In January, consumer confidence increased by more than 4 points due to the falling tension in the foreign currency, the start of a new year, and possible wage/salary hikes. February data announced last week decreased by 2 points compared to the previous month.

We saw a weakening in all four sub-indices that make up consumer confidence. The most severe decline was in the “household financial situation expectation in the next 12 months” sub-index, which declined by 4.2%. One of the sub-indices fell to its historical low – “The thought of buying durable consumer goods in the next 12 months”.

This sub-index has fluctuated much less than the other three over the past decade and is usually hovers between 95-100. However, it has started to fluctuate more sharply in recent months and fell to 89.4 for the first time. This is a critical warning in terms of domestic demand and may indicate a decline in sales in many sectors, such as furniture and white goods. Although there has been no new deterioration in the exchange rates in the last two months, the decline in the thought of purchasing durable goods seems to be a reflection of the rise in the prices of goods and services and an income level that does not comply with this.February confidence indices for four main sectors will be announced by the Central Bank and TurkStat on Tuesday morning. We will probably see individual increases and decreases, not a collective movement. However, there are signs that confidence may be on a downward trend in the industry and services sectors in the next few months.

This week, no domestic or global data will be released that will cause the markets to change direction. For this reason, we may experience a wait-and-see week, which will be shaped by the Russia-Ukraine tension and the Fed’s interest rate movements.

Exchange rates have been moving in a very narrow band for about five weeks. So, seemingly, a downward or upward breakout is likely coming soon.

HAPPINESS IS CONTAGIOUS, SO IS UNHAPPINESS

TurkStat has announced the results of the previous year’s Life Satisfaction Survey in the first quarter of every year since 2003. Those who said they were generally happy in the previous year (in 2020) dropped to their lowest level ever at 48.2%. Those who say “I am unhappy” have reached the highest level since 2009 at 14.5%. The share of those who said they are “neither happy nor unhappy ” also reached its highest level at 37.3%.

In 2020, it was inevitable that developments such as the social restrictions caused by Covid-19, the economic stagnation brought by the pandemic, especially in the service sectors, and the jump in the exchange rate would have negative effects on the level of happiness.

2021 was a year that surpassed 2020 in many ways. Yes, maybe the pressure of the pandemic on social psychology has eased, but it was replaced by economic concerns.

According to the 2021 results announced last Thursday;

• The rate of those who say they are happy is 49.3%.

• The rate of those who say they are unhappy is 16.6%.

• The rate of those who said they were neither happy nor unhappy is 34%.

Four points stand out in the research results at first glance.

►Firstly, although there was a slight increase in 2021, the rate of those who say they are happy has decreased since 2016.

►Second, the rate of those who can say “I am happy” in 2020 and 2021 is below 50% for the first time since 2003.

►Third, there has been a significant increase in the rate of those who say they are unhappy in the last five years. The rate increased from 10.4% to 16.6%. In 2021 the rate increased by 2 points for the first time.

►Fourth, the rate of those who say they are unhappy has reached the highest point of the last 19 years.

When the level of happiness is analyzed by age groups, striking results stand out.

There is a sharp increase in the level of unhappiness in the 18-24 and 25-34 age groups. I mentioned above that there was a deterioration in happiness/unhappiness trends after 2016. If we take that year as a base, the proportion of those aged 18-24 who said they were unhappy increased from 8.6% in 2016 to 20.4% in 2021. In the 25-34 age group, the rate of those who say they are unhappy increased from 9.3% to 17.1%. The rate of those who say “I am unhappy” is increasing in all age groups, but these two groups have the highest increases.

The table below shows the proportion of people who say they are unhappy by age group.

Another thing that makes this situation interesting is that while the age group with the highest happiness rate among all age groups was young people between the ages of 18-24, it is now the age group where it is the lowest.

Finally, let’s look at future prospects. The rate of those who say they are hopeful for the future is 60.7% despite all this negativity. Although this rate is at its lowest level in the last 19 years, it is still a strong level of hope. However, it should be noted that there has been a 9 percentage point increase in the rate of those who are hopeless about the future in 2021, and the rate of those who respond negatively has increased to 39.3%.

These results contain important messages for public administration, local governments, NGOs, workers and employers, and universities.