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2/19/2016, 4:18 PM (Source: TeleTrader)
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Turkey: Consumer confidence slides

The Istanbul 100 Index was trading 0.80% lower at 72,856 points on Friday at 4:27 p.m. CET, with the latest data on consumer confidence in the background of the endangered security and political turmoil after the latest terrorist attack. The Dow Jones Turkey Titans 20 index was showing similar picture: a fall of 0.78% by 4:27 p.m. CET.

Consumer confidence in Turkey plunged 7% in February, to 66.6 points from 71.6 points in the previous month. The latest numbers seem to show return of disappointment, after the sentiment was climbing from the 62.8 in October.

The general economic situation index slipped by 5.9%, reflecting that less people believe there will be a better general economic situation in the next 12 months.

The probability of saving index sank 16.1% to 21.05 points in February from 25.09 points a month ago, while 10.1% less Turkish residents have any confidence that the number of unemployed would be smaller by the end of the year. The financial situation sentiment also fell by 3.1%.

The data was gathered in joint Turkish Statistical Institute (TUIK) and Central Bank of the Republic of Turkey report, published on Friday.

The statistics starts to paint a grim picture of a Turkish economy losing pace and, perhaps more important, confidence, after government cut its expectations for the GDP growth by 1% each, to 3% in 2016 and 4% in 2017. The European Bank for Reconstruction and Development estimated that current situation would cut 0.4% of the rates in the same periods.

The economy is now suffering due to worsened relations with Russia, after Turkish military jet shot down a Russian plane performing military operation in northern Syria in November. Sour relations resulted in Moscow's political rebuttal and economic restrictions, such as prevention of flights from Turkey, and limiting travels from Russia to the country.

Recently, Turkish forces started shelling Kurdish positions in Syria, effectively entering the boots-on-the-ground type of war with its southern neighbour. After the latest apparent terrorist attack in Ankara on February 17, the officials were quick to connect the Syrian attacker to Kurdish rebels. The truce with the PKK, Kurdish party-turned-guerrilla, broke in July 2015 inducing more violence and dragging the country to Syrian war.

And then, there are refugees from the war and other migrants from further east, their number reaching 2 million in south-eastern parts of Turkey. Taking care of them solely takes a lot of government money.

Adding salt to the wound is the ever distant possibility for the country, bridging Europe and Asia, joining the European Union. The process is stalled for a long time now, despite the influence of Turkish economy in the regional, and significant presence in the EU economic area.

Instead of lorries lining up at an overcrowded border to carry goods to the shops, there are coffins lined up in Ankara for the funeral prayers for 28 victims killed in the terrorist attack (pictured). That spells problems for the country with population of nearly 80 million, and GDP per capita of over $19,000.

Image: Beta/AP

Baha Breaking News (BBN) / ZR