Inflation expectations rise in August

ANKARA

The end-year inflation expectations in Türkiye increased from 64.9 percent in July to 70.6 in August, according to the Central Bank’s Survey of Market Participants.

Consumer prices are expected to increase by 2.57 percent on a monthly basis in August, while the monthly inflation rate is forecast to gather pace to 3.28 percent in September, the survey, which was released on Aug. 12, also showed.

Annual consumer price inflation climbed to 79.6 percent in July from 78.6 percent in June, with prices advancing 2.37 percent last month from June.

The 12-month ahead inflation expectations also increased from 40.2 percent in June to 41.99 percent this month.

Participants of the Central Bank survey revised upwards their GDP growth expectations for 2022 from 3.5 percent to 3.6 percent, while they trimmed the economic growth forecast for 2023 from a previous 3.8 percent to 3.6 percent.

The Turkish economy grew by 7.3 percent in the first quarter of 2022 from a year ago, after expanding 9.1 percent in the final quarter of 2021. In the whole of 2021, the country’s economy grew by 11 percent, up from the 1.8 percent expansion recorded in 2020.

Participant of the survey lifted their current account deficit estimate for 2022 from $37.5 billion to $39.3 billion and from $24.36 billion to $25.45 billion for next year.

They also said they expect the U.S. dollar/Turkish Lira rate to be 19.599 at the end of this year, up from 19.209 in the previous survey.

The Survey of Market Participants monitors the expectations of decision-makers and experts in the financial and real sectors regarding various economic variables. This month’s 48 participants of the survey included business organizations, holding companies, banks, the non-financial sector and professionals.