CBRT Survey: Year-End Inflation Expectations Rise, Dollar/Try Forecast Declines
The Central Bank of the Republic of Turkey (CBRT) has published the results of the November Market Participants Survey. The survey was answered by 68 participants consisting of representatives from the real and financial sectors, and the results were formed by aggregating the responses provided by participants.
Inflation Expectations Fluctuations The year-end consumer inflation (CPI) expectation for the current year increased from 44.11% to 44.81% compared to the previous survey period. The 12-month CPI expectation of participants decreased from 27.44% to 27.20%. Particularly, the 24-month CPI expectation rose from 18.08% in the previous survey period to 18.33% in this period. Based on the probability estimates regarding the 12-month outlook, it is predicted that inflation will rise with an average probability of 33.93% in the range of 23.00-25.99%, and with a probability of 36.97% in the range of 26.00-28.99%. According to point estimates, 26.98% of participants expect CPI to increase in the range of 23.00-25.99%, 38.10% expect it to be in the range of 26.00-28.99%, and 20.63% anticipate an increase in the range of 29.00-31.99%.
Overnight Interest Rate and Exchange Rate Expectations According to the November survey results, the overnight interest rate formed in the BIST Repo and Reverse Repo Market and the CBRT's one-week repo auction interest rate expectations remained unchanged at 50%. The year-end exchange rate expectation (USD/TRY) decreased from 36.63 TL to 35.72 TL compared to the previous survey period. The 12-month exchange rate expectation remained almost stable, rising from 42.73 TL to 42.75 TL. Changes in exchange rate expectations are being closely monitored by many market participants, as the impact of currency fluctuations on economic growth and inflationary pressures is one of the focal points in the market.
Minor Changes in GDP Growth Expectations For 2024, GDP growth expectations remained stable at 3.1%, similar to the previous survey period. However, the growth expectation for 2025 decreased from 3.3% to 3.2%. Economic growth forecasts are considered significant market elements as they will be influenced by internal and external demand factors. The survey results provide important insights into the future trajectory of the Turkish economy while continuing to offer data that shapes the decisions of both investors and policymakers. Therefore, the data announced by the CBRT is being closely monitored.
Summary of Expectations
Current Year-End CPI Expectation Previous Period: 44.11% Current Period: 44.81%
12-Month CPI Expectation Previous Period: 27.44% Current Period: 27.20%
24-Month CPI Expectation Previous Period: 18.08% Current Period: 18.33%
12-Month CPI Probability Estimates In the range of 23.00-25.99: 33.93% In the range of 26.00-28.99: 36.97% In the range of 29.00-31.99: 16.94%
24-Month CPI Probability Estimates In the range of 14.00-16.99: 20.28% In the range of 17.00-19.99: 47.20% In the range of 20.00-22.99: 22.30%
Overnight Interest Rate and Repo Auction Interest Rate Expectation 50.00%
Current Year-End Exchange Rate Expectation (USD/TRY) Previous Period: 36.63 TL Current Period: 35.72 TL
12-Month Exchange Rate Expectation (USD/TRY) Previous Period: 42.73 TL Current Period: 42.75 TL
GDP Growth Expectation 2024: 3.1% 2025: 3.2% (Previous 3.3%)