CBRT shares year-end inflation forecast: Difficult days await consumers

The Central Bank of the Republic of Türkiye (CBRT) has announced the results of its Market Participants Survey for November 2024.

In the survey, which was answered by a total of 68 participants consisting of representatives from the real and financial sectors, it was stated that the year-end consumer price index (CPI) expectation has risen to 44.81%.

The survey noted that the US Dollar/Turkish Lira exchange rate expectation showed a slight decline, while there was no change in the 2024 growth expectation.

The survey results were as follows:

"Participants' current year-end consumer inflation (CPI) expectation, which was 44.11% in the previous survey period, has become 44.81% in this survey period. The 12-month ahead CPI expectation, which was 27.44% in the previous survey period, has become 27.20% in this survey period. The 24-month ahead CPI expectation was realized as 18.08% and 18.33% respectively in the same survey periods.

In the November 2024 survey period, when evaluating the participants' probability estimates for 12 months ahead, it is projected that the CPI will increase on average by 23.00% – 25.99% with a probability of 33.93%, by 26.00% – 28.99% with a probability of 36.97%, and by 29.00% – 31.99% with a probability of 16.94%.

According to the evaluation based on point estimates (2) in the same survey period, it is observed that 26.98% of the participants' expectations are in the 23.00% – 25.99% range, 38.10% are in the 26.00% – 28.99% range, and 20.63% are in the 29.00% – 31.99% range.

In the November 2024 survey period, when evaluating the participants' probability estimates for 24 months ahead, it is projected that the CPI will increase on average by 14.00% – 16.99% with a probability of 20.28%, by 17.00% – 19.99% with a probability of 47.20%, and by 20.00% – 22.99% with a probability of 22.30%.

According to the evaluation based on point estimates (2) in the same survey period, when evaluating the 24-month ahead CPI inflation expectations, it is observed that 17.86% of the participants' expectations are in the 14.00% – 16.99% range, 41.07% are in the 17.00% – 19.99% range, and 30.36% are in the 20.00% – 22.99% range.

The participants' current month-end overnight interest rate expectation in the BIST Repo and Reverse-Repo Market and the CBRT one-week repo auction interest rate current month-end expectation were both realized as 50.00% in this survey period, just as in the previous survey period.

The participants' GDP growth expectation for 2024 was realized as 3.1% in this survey period, just as in the previous survey period. The GDP growth expectation for 2025, which was 3.3% in the previous survey period, was realized as 3.2% in this survey period."