CBRT shares market survey: Decline in inflation expectations

The CBRT has announced the results of its "Survey of Market Participants" for July.

The July 2024 Survey of Market Participants was answered by 65 participants consisting of representatives from the real and financial sectors, and the results were evaluated by aggregating the participants' responses.

Participants' current year-end consumer inflation (CPI) expectation, which was 43.52 percent in the previous survey period, was 42.95 percent in this survey period. The 12-month ahead CPI expectation was 30.02 percent in this survey period, compared to 31.79 percent in the previous period. The 24-month ahead CPI expectation was 20.33 percent and 19.32 percent in the same survey periods, respectively.

The survey results are as follows:

"In the July 2024 survey period, when evaluating the participants' probability estimates for 12 months ahead, it is projected that the CPI will increase with an average probability of 36.57 percent in the 25.00 – 28.99 percent range, with a 41.38 percent probability in the 29.00 – 32.99 percent range, and with a 10.82 percent probability in the 33.00 – 36.99 percent range.

According to the evaluation based on point estimates in the same survey period, it is observed that 31.67 percent of participants' expectations are in the 25.00 – 28.99 percent range, 35.00 percent of expectations are in the 29.00 – 32.99 percent range, and 18.33 percent of expectations are in the 33.00 – 36.99 percent range.

In the July 2024 survey period, when evaluating the participants' probability estimates for 24 months ahead, it is projected that the CPI will increase with an average probability of 23.59 percent in the 14.00 – 17.99 percent range, with a 50.61 percent probability in the 18.00 – 21.99 percent range, and with a 16.49 percent probability in the 22.00 – 25.99 percent range.

According to the evaluation based on point estimates in the same survey period, when evaluating the 24-month ahead CPI inflation expectations, it is observed that 22.64 percent of participants' expectations are in the 14.00 – 17.99 percent range, 47.17 percent of expectations are in the 18.00 – 21.99 percent range, and 20.75 percent of expectations are in the 22.00 – 25.99 percent range.

Participants' current month-end overnight interest rate expectation in the BIST Repo and Reverse-Repo Market was 50.30 percent in this survey period, compared to 50.77 percent in the previous survey period. The current month-end expectation for the CBRT one-week repo auction interest rate remained at 50.00 percent, as it was in the previous survey period.

Participants' current year-end exchange rate (US Dollar/TL) expectation was 37.37 TL in this survey period, compared to 37.75 TL in the previous survey period. The 12-month ahead exchange rate expectation was 41.52 TL in this survey period, compared to 41.41 TL in the previous survey period.

Participants' GDP growth expectation for 2024 was 3.4 percent in this survey period, compared to 3.3 percent in the previous survey period. The GDP growth expectation for 2025 was 3.6 percent in this survey period, compared to 3.7 percent in the previous survey period."