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Inflation expectations among households in Türkiye improved in November, according to data on Tuesday, as Treasury and Finance Minister Şimşek stressed that continued commitment to disinflation-oriented economic policies would support further improvements.
Inflation lastly eased to 32.87% annually and 2.55% monthly in October, according to official data. Price pressures in the previous two months were above expectations, prompting the central bank to slow its rate-cutting cycle.
Household expectations for inflation in 12 months’ time declined by 2.15 percentage points to 52.24% in November, the Central Bank of the Republic of Türkiye’s (CBRT) report said on Tuesday.
Compared to the same period last year, expectations improved by 12 percentage points, Şimşek wrote on the social media platform X.
Market participants’ expectations increased by 0.23 percentage points from the previous month to 23.49%, the report showed.
Real-sector respondents’ forecasts fell 0.6 percentage points to 35.70%.
The share of households expecting inflation to decline over the next 12 months also eased. The ratio fell 1.67 percentage points month-over-month to 24.83%, the data showed.
The CBRT has repeatedly said it closely monitors the alignment of inflation expectations and pricing behavior with its own projections.
Earlier this month, it raised its inflation forecast range for the end of this year to 31%-33% from 25%-29%. However, it kept its interim inflation target unchanged at 24%, outside that range.
The bank kept its interim target of 16% for end-2026, and CBRT Governor Fatih Karahan said it was ready to tighten policy if inflation diverges significantly from targets. The bank also left unchanged its 13%-19% forecast range for the end of next year.
The end-2027 interim target remained at 9%.
“As we resolutely continue to implement our disinflation-focused policies and with the ongoing fall in inflation, we foresee that the improvement in expectations will strengthen and the rigidity in pricing behavior will decrease,” Şimşek said on Tuesday.
“We will continue to take the necessary steps with determination to make our economy a strong structure where price stability is achieved, productivity increases and the level of welfare rises.”
The CBRT slowed its easing cycle with a 100-basis-point cut in its policy rate to 39.5% at its latest policy-setting meeting on Oct. 23, flagging renewed inflation risks that pointed to a slowdown in the disinflation process.
At the previous meeting in September, it had already tapped the brakes with a 250-basis-point reduction, having lowered the rate by 300 basis points in July as it resumed the rate-cutting cycle disrupted by market volatility due to domestic political developments earlier this year.
In April, the bank hiked its policy rate to 46% from 42.5%, reversing the easing that had begun in December amid volatility over the arrest in March of former Istanbul Mayor Ekrem Imamoğlu. He was jailed pending trial over graft charges.
