Businesses become more optimistic about inflation: Survey
ISTANBUL
The 12-month-ahead annual inflation expectations, compared to the previous month, decreased by 1.2 points to 23.4 percent for market participants and by 0.8 points to 39 percent for the real sector in July, a survey by the Central Bank showed on July 28.
However, the 12-month inflation expectations increased by 1.5 points to 54.5 percent for households, according to the bank’s monthly Sectoral Inflation Survey.
The proportion of households expecting a fall in inflation in the next 12 months, compared to the previous month, decreased by 4.1 points to 26.6 percent, the Central Bank said.
Despite recent internal and external economic shocks, inflation continues to decline, Finance Minister Mehmet Şimşek said in an interview with private broadcaster Kanal 7 on July 27.
The government aims to close the year with annual inflation in the 20s, targeting below 30 percent, Şimşek said, noting that headline inflation has declined to 35 percent, marking a nearly 50 percent drop compared to 2022–2023 levels.
Şimşek noted that food inflation in June stood at 30.2 percent and would likely have been lower if not for agricultural frost and drought.
“When you look at the big picture, I believe the shocks were handled effectively. We’ve returned to the levels seen before they occurred,” he also said.
Şimşek stated that financial indicators have largely reverted to pre-shock levels.
“Our gross reserves were slightly above $170 billion in mid-March, and we’re back at that level now. In terms of net reserves excluding swaps, more than two-thirds of the losses have been recovered,” he explained.
“We are maintaining fiscal discipline. We will not deviate from our budget targets, especially on the spending side. However, growth is moderate and slightly below our projections, which negatively affects our revenue performance,” Şimşek said.
