The central bank's inflation forecast is encouraging.

The Central Bank of the Republic of Turkey (CBRT) announced the sectoral inflation expectations for October. According to CBRT data, the sectoral inflation expectation has fallen to its lowest level since March 2022.

In October, the annual inflation expectations for 12 months later decreased by 0.1 points to 27.4% for market participants, by 1.6 points to 49.5% for the real sector, and by 4.4 points to 67.2% for households. Thus, the inflation expectation of households has reached its lowest level since March 2022. There has been a decline in citizens' inflation expectations for the past 4 months.

ANNUAL INFLATION EXPECTATION

The proportion of households expecting inflation to decrease in the next 12 months decreased by 0.7 points compared to the previous month, reaching 28.3%. The gap between the inflation expectations of market participants and citizens has narrowed to 39.8. As of the end of September, inflation stands at 49.38%. The Central Bank's inflation forecast for the end of the year is 38%, and for the end of 2025, it is 14%. The Medium-Term Program (MTP) forecasts inflation to be 17.5% by the end of 2025.

HOW IS THE DATA OBTAINED?

The data is obtained by compiling the annual consumer inflation expectations for 12 months later from the market participants survey, economic tendency survey, and the consumer tendency survey conducted in cooperation with TURKSTAT, as well as from financial and real sector experts, manufacturing industry firms, and households. The CBRT started publishing sectoral inflation data from June onwards.