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Enhanced projections for inflation by the end of 2025, as indicated by a recent survey.

Central Bank's July 16 Survey of Market Participation reveals a dip in predicted inflation for the end of 2025, dropping from 30.35% in May to 29.86% in June.

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Central Bank's June Survey of Market Participation reveals a decrease in anticipated inflation...
Central Bank's June Survey of Market Participation reveals a decrease in anticipated inflation rates for the end of 2025, falling from 30.35% in May to 29.86% in June, as of July 16th.
TURKEY'S INFLATION OUTLOOK

Enhanced projections for inflation by the end of 2025, as indicated by a recent survey.

Expectations for Inflation Drop

Ankara witnessed a dip in the predicted inflation rate for the last quarter of 2025, with the figure dropping from 30.35% in May to 29.86% in June according to the Central Bank's June Survey of Market Participation, as announced on July 16.

  • Highlights
  • Monthly Inflation: Consumers expect a 1.61% monthly price hike in June, while the monthly inflation forecast for July is 1.86%.
  • Annual Inflation: Turkey's annual inflation rate for May was 35.41%, the lowest since November 2021, having decreased from 37.86% in April.

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Key Points

  1. Inflation Decrease: 12-month ahead and 24-month ahead expectations declined from 25.06% to 24.56% and from 17.77% to 17.35%, respectively.
  2. End of Next Year Forecast: Survey participants reduced their inflation expectations for the end of the next year from 20.55% to 20.44%.
  3. Central Bank Interest Rate: The Central Bank is expected to keep the policy interest rate at 46% this week, according to a state-run Anadolu Agency poll of economists.
  4. GDP Growth: The Turkish economy is estimated to expand by 2.9% this year, with a steady GDP growth estimate for 2026 at 3.7%.
  5. Monetary Policy: The Central Bank has emphasized its commitment to maintaining a tight monetary policy stance until a sustained decline in inflation and price stability are achieved.

Enrichment Information

  • Current Inflation Rate: As of May 2025, Turkey's annual inflation rate is 35.41%, the lowest since November 2021.
  • Central Bank Forecast: The Central Bank maintains a year-end inflation forecast of 24% for 2025, with a range of 19-29%.
  • Market Expectations: Market participants anticipate inflation to cool down to approximately 29.86% by the end of 2025.
  • Inflation Projections Beyond 2025: The Central Bank projects inflation to drop to 12% in 2026 and reach 8% by the end of 2027.
  • The Central Bank's June Survey of Market Participation suggests a decline in 12-month ahead and 24-month ahead inflation expectations, indicating a possible shift in investment strategies in the finance sector related to Turkey.
  • With the decrease in inflation expectations, individuals who value financial stability might consider investing in Turkish assets as part of their portfolio diversification, considering the potential for a more stable economic environment in the future.

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