Inflation expectations deteriorate slightly in April
ANKARA
Inflation expectations for the end of 2025 surged from a previous forecast of 28.04 percent to 29.98 percent, according to the Central Bank’s April Survey of Market Participants.
Consumer prices are expected to increase by 3.07 percent in April and 2.2 percent in May, showed the survey on April 11.
The annual inflation rate slowed to 38.1 percent in March, marking its lowest level since December 2021. The monthly inflation was 2.46 percent.
The 12-month ahead inflation expectations also increased from 24.55 percent to 25.56 percent, according to the survey.
In February, the Central Bank raised its year-end inflation forecast for 2025 from 21 percent to 24 percent while keeping it unchanged at 12 percent for 2026.
Commenting on the latest development in the global economy, Finance Minister Mehmet Şimşek said on April 10 that the decline in Brent crude oil prices, triggered by U.S. President Donald Trump's tariffs, could positively impact Turkish inflation and the current account deficit.
"If Brent crude oil remains below $65, inflation could be approximately 1 to 1.6 percentage points below the target at the end of the year…If oil prices continue at this level, the current account deficit could fall below 1.5 percent of the national income,” Şimşek said.
Central Bank Governor Fatih Karahan and his team have done an excellent job by taking steps in the right direction regarding monetary policy, the minister also said.
The recent turmoil in the global economy could pose downward risks to growth, Şimşek warned, but vowed that "We will ensure spending discipline in public finance and successfully reduce inflation."
Participants of the Central Bank survey see the U.S. dollar/Turkish Lira rate at 43.6, an upward revision from the previous month’s 42.79.
They slashed their growth expectations for the Turkish economy from 3.1 percent to 3 percent for 2025, while lowering the GDP expansion forecast from 4 percent to 3.8 percent for 2026.
The Turkish economy is expected to post a current account deficit of $19.12 billion at the end of 2025, a downward revision from the previous survey’s $19.42 billion.
Survey participants lowered their forecast for the current account deficit for 2026 from $24.49 billion to $24.12 billion.
