Market Participants Raise Year-End Inflation Expectations to 45.28%

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Market Participants Raise Year-End Inflation Expectations to 45.28%

In the Central Bank of the Republic of Turkey (CBRT) survey, market participants' year-end consumer price index (CPI) expectation rose from 44.81% to 48.28%. The CBRT announced the results of the "Market Participants Survey" for December.

The survey results were as follows: The 12-month CPI expectation was 27.20% in the previous survey period, while this period it is 27.07%. The 24-month CPI expectation for the same periods was 18.33% and 18.47%, respectively. In the December 2024 survey period, when evaluating participants' probability estimates for 12 months ahead, it is anticipated that the CPI will increase with an average probability of 25.37% in the range of 23.00 – 25.99% and with a 46.80% probability in the range of 26.00 – 28.99%, while a 15.62% probability for an increase in the range of 29.00 - 31.99%.

According to the assessment based on point estimates during the same survey period, it was observed that 19.70% of participants expect an increase in the range of 23.00 – 25.99%, 48.48% in the range of 26.00 – 28.99%, and 21.21% in the range of 29.00 – 31.99%.

In the December 2024 survey period, regarding 24-month ahead probability estimates, it is anticipated that the CPI will increase with an average probability of 16.49% in the range of 14.00 – 16.99%, with a 43.62% probability in the range of 17.00 – 19.99%, and with a 23.84% probability in the range of 20.00 – 22.99%.

Based on the assessment of point estimates during the same survey period, when evaluating 24-month ahead CPI inflation expectations, it was observed that 19.30% of participants expect an increase in the range of 14.00 - 16.99%, 42.11% in the range of 17.00 – 19.99%, and 26.32% in the range of 20.00 – 22.99%.

Participants' expectations for the overnight interest rate at the end of the current month in the BIST Repo and Reverse Repo Market were 50.00% in the previous survey period, while this period it decreased to 48.59%. The one-week repo auction interest rate expectation for the end of the current month was 50.00% in the previous survey period and is 48.51% this period.

Participants' GDP growth expectation for 2024 was 3.1% in the previous survey period, while it is 3.0% this period. The GDP growth expectation for 2025 decreased from 3.2% in the previous period to 3.1% in this period.

The December 2024 Market Participants Survey was answered by 69 participants consisting of representatives from the real sector and the financial sector, and the results were evaluated by aggregating the participants' responses.