Households', market and real sector's 12-month inflation expectations decline

Investing.com - The Central Bank of the Republic of Turkey (TCMB) has published the current results of its “Sectoral Inflation Expectations” study, which includes market players, real sector representatives and households' inflation expectations for the coming period.

The study is based on the results of the Survey of Market Participants conducted regularly by the Central Bank, the Economic Orientation Survey and the Consumer Trends Survey carried out in cooperation with the Turkish Statistical Institute (TÜIK).

According to new data released, expectations for annual consumer inflation after 12 months as of August 2025 declined compared to the previous month in all groups. These expectations signal that inflationary pressures may tend to decrease in part in the coming period.

Inflation expectations of market participants fell by 0.6 points

The outlook for annual consumer inflation after 12 months from the group of market participants, made up of financial and real sector experts, fell 0.6 points from the previous month. Thus, the estimate of this group fell to 22.8%. This rate suggests that market experts predict inflation will run at more controllable levels in the coming period.

Market participants' inflation expectations are driven by monetary policies in Turkey's economy, financial conditions and sensitivity to global economic developments. Therefore, the change in expectations is considered an insightful indication of the possible process of economic transformation.

Real sector inflation forecast falls more sharply

The expectations of real sector companies operating in the manufacturing industry also declined, drawing attention. After 12 months, the forecast of the annual inflation of the real sector representatives decreased by 1.3 points compared to the previous month, falling to 37.7%. This indicates that inflation concerns in the sector have eased somewhat.

The expectations of real sector representatives are shaped by many fundamental factors, such as production costs, input prices and the overall economic outlook. In this direction, the decline in expectations is assessed as a slight weakening of inflationary elements that may put pressure on production in the coming period.

Limited pullback in household inflation expectation

Household inflation expectations, compiled as part of the Consumer Trends Survey, decreased 0.4 percentage points from the previous month to 54.1%. Although households are considered to be the most affected by inflation, the expectation level continues to remain high.

The perception of household regarding price developments is directly related to the items of expenditure in their daily lives, the course of food and energy prices. Therefore, although a small decrease in expectations is observed, the levels that remain higher compared to other groups reveal that inflationary pressure continues to be felt on the consumer side.

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