Inflation expectations for end of 2025 improved, shows survey

ANKARA

Inflation expectations for the end of 2025 declined from 30.35 percent in May to 29.86 percent in June, showed the Central Bank’s June Survey of Market Participation on July 16.

Consumer prices are expected to increase by 1.61 percent monthly in June, while participants’ monthly inflation forecast for July is 1.86 percent.

The 12-month ahead inflation expectations also came down from 25.06 percent in May to 24.56 percent in June, while the 24-month ahead expectations fell from 17.77 percent to 17.35 percent.

Türkiye's annual inflation was at 35.41 percent in May, down from 37.86 percent in April, its lowest level since November 2021.

The monthly inflation also slowed from 3 percent to 1.5 percent.

Participants of the survey lowered their inflation expectations for the end of next year from 20.55 percent to 20.44 percent.

In May, the Central Bank kept its inflation forecast for 2025 at 24 percent, while leaving its end-2026 forecast unchanged at 12 percent. It targets inflation to decrease to 8 percent in 2027 and stabilize at 5 percent in the medium term.

With inflation slowing, all eyes are now on the Central Bank, which will announce its interest rate decision later this week on June 19.

The Central Bank is expected keep the policy interest rate at 46 percent this week, according to a state-run Anadolu Agency poll of economists.

The Central Bank increased the rate from 42.5 percent to current 46 percent in April. The bank also lifted its overnight lending rate from 46 percent to 49 percent and the overnight borrowing rate from 41 percent to 44.5 percent.

The bank has been stressing that it will maintain its tight monetary policy stance until permanent decline in inflation is sustained and price stability is achieved, while vowing to do whatever it takes to bring inflation down in line with its intermediate targets.

The Central Bank’s survey on June 16 also showed that the Turkish economy is expected to expand by 2.9 percent this year, unchanged from the previous survey.

Participants of the survey kept their GDP growth estimate for 2026 steady at 3.7 percent.

The Survey of Market Participants monitors the expectations of decision-makers and experts in the financial and real sectors.