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Inflation expectations for the next 12 months have risen to 59.9% among Turkish households, even as forecasts from market participants and the real sector show signs of improvement, the Turkish central bank reported on Friday.
The data shows a 0.6 percentage point increase in household inflation forecasts compared to April, contrasting with a 0.5 point drop among market participants, whose expectations fell to 25.1%. The real sector also reported a more favorable outlook, with its inflation forecast declining by 0.7 points to 41%.
Despite the uptick in the overall inflation forecast from households, the share of those expecting inflation to decline over the next year rose slightly to 27.8%, suggesting a mild but notable shift in public perception.
However, households continue to expect significantly higher inflation than the professional and business sectors, highlighting ongoing concerns over rising living costs.
Treasury and Finance Minister Mehmet Simsek responded to the report by emphasizing the improvement in institutional expectations. In his post on X, he credited the government’s disinflation program and communication strategy for containing volatility: “Our program, which enhances predictability and trust, alongside our determined stance and effective communication, has limited the spillover of financial volatility into expectations.”
Simsek also drew attention to the substantial year-over-year improvements, noting that inflation expectations have declined by 15 points among real sector participants and 8 points among financial market professionals. Household forecasts, despite their recent rise, have also improved by 16 points compared to May 2024, he added.
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