MNI BRIEF: Turkish Inflation Expectations Rose Before Rate Cut

Turkish household’s 12-month-ahead inflation expectations continue to decline, according to the latest Koc University Household Inflation Expectations Survey, although both annual average and year-end inflation are seen marginally higher than previously.

Average inflation expectations for the 12-month period through September 2026 fell to 58%, versus 59% in August. But annual inflation expectations rose slightly, from 69% to 70%, while year-end inflation expectation also increased, from 62% to 65%.

By comparison, in September 2024 annual inflation expectations were 111%, year-end inflation expectations at 96%, and 12-month forward inflation expectations at 102%.

The KU study data was collected between September 1-6. The CBRT lowered key interest rates by 250bps on September 11, to leave the policy rate at 40.5%, and expects headline inflation to end the year at 25-29%.

“Considering the March–September period as a whole, the results of the Koç University Household Expectations Survey generally follow a similar trend to those of the CBRT’s Sectoral Inflation Expectations Survey, except in June, and also appear to converge in terms of levels,” the study’s authors said in a statement.