Koç University Inflation Survey: Expectations Downward

New Inflation Expectations Report from Koç University

Koç University has published the Household Inflation Expectation Survey, revealing a notable downward trend in household inflation expectations.

Inflation Expectations Declining

According to the survey conducted with 2,924 participants between January 16-21, 2023, the inflation expectation for the next 12 months has decreased by 1 point compared to the previous month, falling to 52 percent. During this period, the inflation experienced in the past 12 months decreased from 66 percent to 62 percent. These figures indicate that households expect an improvement of approximately 10 points in future inflation.

Details of the Expectations in the Survey

The average inflation expectation was determined to be 52 percent, while the median value was measured at 47 percent.

Focusing on Investment Preferences

In saving trends, a strong interest in gold has been observed, while there has been a weakening in preferences for investment vehicles other than gold. Participants emphasized new economic developments as the most important factor determining inflation, and approximately half of the participants stated they based their predictions on the inflation data from the last five years.

Economic Policies Connected to Trust

There is a notable inverse relationship between trust in economic policies and inflation expectations. The difference in expectations between those who trust and those who do not was determined to be 13 points. Over a three-year period, a significant portion of participants (23 percent) predicted that the annual average inflation rate would be shaped in the 20-30 percent range.