Financial savings among Turks remain low at 14 percent, wasteful consumption high, study says

A recent study by the Ministry of Customs and Trade has revealed that only 14 percent of people in Turkey spared a portion of their income for savings.

The study titled "The Extent of Waste" involved face-to-face interviews of some 1,650 participants, aged between 18 and 69, in 26 cities across Turkey's seven geographical regions.

Some 56 percent of the participants cited lack of income as the reason for not being able to save, whereas 26 percent cited debts.

Speaking on the issue, Customs and Trade Minister Bülent Tüfenkci said savings were the backbone of healthy economic growth. He noted that savings should not only be regarded in terms of financial savings, but also in curbing wasteful consumption, such as in the case of smartphones.

The use of smartphones has reached 84 percent in Turkey, the study said, adding that only 14.7 percent of people were using regular cellphones while only 1.5 percent did not use any cellphones at all.

The research put the average smartphone changing cycle in Turkey at 3.2 years, whereas 7 percent of smartphone owners changed their devices once a year and 17 percent bought a new smartphone every two years.

With the consumption of bread, a key staple food in Turkey, the study showed 8.6 percent of the population has the tendency to waste, which amounts to 226 grams of bread per person every week.

People in Turkey have a habit of buying more bread than their household needs, assuming that guests might visit, Tüfenkci said, adding that the approach may be hospitable but paved the way for wasteful consumption.

Meanwhile, spending on newspapers, books, and magazines was described as a compulsory expenditure by 57 percent of the public, the study said, and a high number of participants defined taking a cab, eating snacks, eating out, going on a vacation or cultural activities as non-compulsory expenditures.

According to the study, automobile ownership rate in Turkey stood at 27 percent and the average automobile changing cycle was 6.2 years. Around 10 percent of car owners upgrade their vehicles once every two or three years.

For Turkey, a developing economy with very limited manufacturing in high technology products, these numbers point to wasteful consumption. Most of Turkey's medium technology industrial products including automobiles or appliances also rely on foreign know-how, thus allowing companies to make large profits through royalty payments.

In comparison, a 2015 study in the U.S., the cradle of the automotive industry with an average annual GDP per capita of $57,000, showed that average car ownership was at 6.6 years whereas in Turkey, with an average annual per capita GDP of $11,000, this period was shorter at 6.2 years.

According to World Bank data, the gross savings rate in Turkey for 2016 stood at 24.8 percent while it was more than 32 percent in Indonesia, one of the well-performing G-20 economies.

The data for 2015 showed that the China's gross savings rate was recorded at 48.88 percent while it was 19.1 percent in the U.S. The rate, however, in Brazil remained well below at 13 percent and 27 percent in Russia.