Analysis of the Relationship between Consumer Confidence Index and Inflation in Türkiye

Abstract

The course of macroeconomic indicators has an impact on consumers' decisions and expectations. Consumer confidence refers to the tendencies of consumers in the face of economic conditions and the situation regarding the decisions to be taken by other decision units. It is thought that the realized and expected inflation within the economic indicators is important in the consumers' perception of economic developments. Therefore, price stability represents one of the main factors determining consumer decisions regarding income, consumption expenditure and savings. Price stability in Turkey has varied over the years. The devastating effects of inflationary processes in the economic development process were high. From this point of view, investigating the relationship between consumer confidence and inflation in Turkey has been the main motivation of the study. The results of the analysis made with the 2012:01-2023:01 monthly data provided evidence for the existence of a long-term relationship between the variables.