TURKEY: ‘High Consumer Demand will Lead to Market Recovery’
03.12.2008 Business | Turkey
Consumer demand in Turkey has not declined and still remains strong despite ongoing global financial turmoil, a fact that is likely to help domestic markets recover during the first few months of 2009, a poll conducted by Ipsos KMG, one of the world’s leading survey-based marketing research firms, has shown.
Ipsos KMG Turkey CEO Vural Çakır announced results of their “Expectations, Preferences and Choices 2009” report. The report was based on the company’s annual poll, which was conducted Nov. 10-22 in 26 provinces throughout Turkey.
One of the most important results revealed by the poll is that consumer demand has increased despite the ongoing global financial crisis. “Turkish consumers’ tendency to spend money is still high despite the crisis, the next few months will show that this potential will help the domestic market recover,” said Çakır, adding that the government’s fiscal policies against the crisis will play a determining role in the recovery. Çakır stated that consumers were anxious due to the crisis and that they would wait and watch the developments for a period of time. He noted that there would be a slowdown in domestic economic activity in the short term; however, after the first few months of 2009, domestic markets could revive. “It really depends on what kind of developments we see in domestic and global markets. We are passing through a volatile period. Things could turn out much better than we could ever predict,” stressed Çakır.
Despite current concerns due to the crisis, consumers still tend to spend money on goods such as high-tech devices and furniture as well as on real estate and holiday packages.
Consumers are more optimistic about their own financial situation than they are about the general economic outlook. Of the respondents, 82 percent said the ongoing global financial crisis would affect Turkey negatively while only 75 percent thought that they would personally be adversely affected by the crisis.
A majority of consumers polled, 58 percent, do not agree with government’s policies in dealing with the crisis. Consumers’ responses indicate that families will restructure their budgets, cutting recreational expenditures, such as entertainment and sports activities, as much as they can. On the other hand, the tendency to spend money for daily shopping, education and health is likely to increase in the new year. Also, consumer behavior has changed; people tend to make small expenditures for the short term rather than buying huge amounts of goods in a single shopping trip. According to the poll, people in Turkey tend to invest their money in gold and real estate.
İstanbul has highest share in consumption expenditures
İstanbul has the largest share in Turkey’s consumption expenditures, according to a comparison of the 2005, 2006 and 2007 Household Budget Surveys by the Turkish Statistics Institute (TurkStat).
The city accounted for 23 percent of Turkey’s total consumption expenditures during 2005-07. The Aegean and Mediterranean regions followed İstanbul with 15.1 percent and 12.6 percent, respectively. Only 2.2 percent of the country’s total expenditures were in the northeast Anatolia region.
Based on the breakdown of consumption expenditures, southeast Anatolia had the highest share of expenditures (39.3 percent) on food and non-alcoholic beverages compared to the rest of the country, but the lowest share (1.1 percent) in educational expenditures.
In İstanbul, while expenditures on housing and rent ranked the highest in the country, at 31.5 percent, its expenditures on food and non-alcoholic beverages amounted to only 20.6 percent of its total consumption.
İstanbul also saw the highest level of consumption expenditures in restaurants and hotels. In terms of the share of transportation expenses in total expenditures, the Aegean region topped the list. Educational expenditures in western Turkey also ranked highest compared with the rest of the country.
original text on http://www.seeurope.net/?q=node/16545