Inflation expectations for 2024 at 42.9 percent

ANKARA

Inflation expectations for 2024 increased slightly from 42.04 percent in January to 42.96 percent in February, according to the Central Bank’s Survey of Market Participants.

The 12-month-ahead inflation expectation, however, declined from 39.1 percent in the January survey to 37.78 percent this month.

Expectations for the 24-month-ahead inflation fell from 23.7 percent to 23.05 percent.

The annual inflation rate in Türkiye quickened from 64.77 percent in December 2023 to 64.86 percent in January.

In its quarterly report, unveiled on Feb. 8, the Central Bank kept its inflation forecasts for 2024 and 2025 unchanged from the previous at 36 percent and 14 percent, respectively.

The bank’s new governor, Fatih Karahan, earlier this month vowed to maintain a tight monetary stance until inflation falls to levels consistent with its target.

“We will be watchful of inflation expectations and pricing behavior. We stand ready to act in case of any deterioration in the inflation outlook,” Karahan said on Feb. 8, speaking at a news conference in Ankara to present the bank's quarterly inflation report.

He also reiterated that the banks assessed that the monetary tightness required to establish the disinflation course is achieved.

It was Karahan’s first public appearance after he replaced Hafize Gaye Erkan, who resigned last week after less than a year in the job.

The bank raised its main policy rate by a cumulative 3,650 basis points since June last year. It lifted the one-week repo auction rate by 250 basis points to 45 percent last month.

The Central Bank’s Monetary Policy Committee is set to meet again to decide about the policy rate on Feb. 22.

A recent poll of economists showed that the bank is expected to keep the interest rate unchanged at 45 percent next week.