FKB Economic Outlook Survey: Inflation Expectation Decreased by 0.06% to 2.48%
Foreks - The Financial Institutions Association (FKB), which operates to grow the Turkish economy through non-banking financial sector players, has published the November bulletin of the 'Financial Institutions Association Economic Outlook Index' (FKB-EGE) developed in collaboration with Istanbul University.
The FKB, which supports economic development by facilitating access to financing with 125 companies in five sectors under its umbrella, showed the effects of tightening policies in the November index and survey data. According to the FKB Economic Outlook Survey data, inflation expectations decreased by 0.06 percentage points compared to the previous month, falling to 2.48%. Considering the changes in year-end expectations in the survey, it was interpreted that the tightening of monetary policy continues to reflect on inflation expectations, which, despite showing partial fluctuations, has settled into a decreasing-stagnant path.
Looking at the trend of the FKB-EGE, calculated since February 2015 and following an increasing trend until March 2018, the index reached its lowest level of 95.15 in October 2018 and has exhibited a fluctuating trend since November 2018. In October 2024, the index increased by 0.39 points compared to the previous month, reaching a value of 99.92.
Moreover, the sub-component of the index, the Factoring Index, also increased by 0.17 points in October 2024, reaching a value of 100.76. The Financial Leasing Index, another sub-component of the index, rose by 0.21 points to 102.53, while the Financing Index increased by 0.79 points to 96.46.
According to the November results of the FKB Economic Outlook Survey, participants' expectations for GDP growth rate are 3.24% for the end of 2024 and 3.5% for the end of 2025. Compared to the October 2024 survey, which had a GDP growth expectation of 3.2% for the end of 2024 and 3.40% for the end of 2025, a partial increase was observed in the 2025 year-end growth rate expectation. When compared to the OVP's projections of 3.5% and 4% for those years, and the IMF's projections of 3.6% and 2.7%, participants’ GDP growth expectations were below OVP and IMF projections for the end of 2024, but above IMF projections for the end of 2025.
Prof. Dr. Murat Şeker, the academic advisor of the FKB Index and a faculty member at Istanbul University's Department of Economics, stated that the observed increases in both sub-indices and the main index level in October suggest a potential positive development in the general economic conjuncture for the upcoming period. He noted that the year-end inflation expectation is closely aligned with the Central Bank's expectations, indicating a diminishing weight of the option of a decrease in transaction volume expectations in the sector, while the same decrease in pessimistic expectations regarding the general trajectory has not been observed.