A wave of implosions in Turkey's fund industry last month rattled markets, triggering a broader stock rout and freezing access to some assets. In the fallout, October consumer confidence dropped 7.7% to 84.8, according to the Turkish Statistical Institute.
October marked the lowest reading since January. It was also described as the sharpest monthly fall in three years and, separately, as the steepest month over month decline since August 2023. The gauge is based on household surveys and sits below the 100 threshold that denotes pessimism.
According to Selva Demiralp, an economics professor at Koc University in Istanbul, "The unease generated by the fund liquidations spread well beyond financial markets into household behavior more broadly." She pointed to Koc survey findings showing that 21% of households now say they plan to put money in investment funds, down from 28% - the largest month-over-month shift across asset classes. More respondents shifted toward traditional havens like gold, foreign currency, and time deposits.
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Confidence under 100 signals a pessimistic backdrop, and the latest household surveys show interest moving away from investment funds and toward gold, foreign currency, and time deposits. For anyone tracking Turkey, that shift outlines where retail money is leaning after the recent fund stress.
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