Inflation expectations of households, companies differ vastly

ANKARA

Inflation expectations of households, companies and experts continue to differ significantly, a Central Bank survey has shown.

Households’ 12-month ahead inflation expectations increased from 71.98 percent in July to 73.14 in August, which marked the highest level in households’ inflation expectations since May.

The real sector’s expectations declined by 1.2 points to 53.8 percent, while market participants’ inflation estimates fell by 1.3 points to 28.7 percent, according to the bank’s Sectoral Inflation Expectations survey on Aug. 27.

Market participants include decision-makers and experts from the financial and real sectors.

The proportion of households expecting a fall in inflation in the next 12 months increased by 0.3 points to 29.6 percent, said the Central Bank.

Türkiye’s annual inflation rate eased from 71.6 percent in June to the nine-month low of 61.78 percent in July, according to the latest official data.

The monthly increase in consumer prices accelerated from 1.64 percent in June to 3.23 percent in July.

Indicators for the third quarter suggest that domestic demand continues to slow down with a diminishing inflationary impact, the Central Bank said in a statement it released after a rate-setting meeting on Aug. 20, where it kept the policy rate unchanged at 50 percent.

The alignment of inflation expectations and pricing behavior with projections has gained relative importance for the disinflation process, the bank said, voicing confidence that the disinflation will gain strength in the coming months.