Inflation expectations improve further in July: Survey

ANKARA

Inflation expectations for the end of 2024 declined from 43.52 percent in June to 42.95 percent in July, the Central Bank’s regular Survey of Market Participants has shown.

The annual inflation rate slowed from 75.45 percent in May to 71.6 percent in June.

Commenting on the results of the survey, Finance Minister Mehmet Şimşek said: “Inflation expectations are converging to our target.”

“Although we expect an increase in monthly inflation in July due to temporary effects, we foresee a significant decrease in annual inflation,” Şimşek wrote on X.

The disinflation process will become more evident in the coming months, the minister stated.

“The fact that inflation expectations are improving at a time when actual annual inflation is on the rise shows the belief that our disinflation policies will succeed,” Şimşek wrote.

The Central Bank forecasts a year-end inflation rate of 38 percent.

The 12-month ahead inflation expectations declined from a previous 31.79 percent to 30.02 percent, according to the bank’s survey on July 22.

Participants of the survey expect consumer prices to advance 2.77 percent month-on-month in July. In June, the monthly inflation rate was 1.64 percent.

They lifted their GDP growth estimates for 2024 from 3.3 percent to 3.4 percent, but slashed growth expectations for 2025 from 3.7 percent to 3.6 percent.

The U.S. dollar/Turkish Lira rate will be 37.37 at the end of 2024, according to the survey, a downward revision from 37.75 in the June survey.