Turkish Central Bank Survey Points to Decreasing Inflation Expectations for 2024, Euro Forecasts in Focus

The Turkish Republic Central Bank (TCMB) has released its latest Market Participants Survey, revealing a decrease in year-end inflation expectations. This survey, closely watched by economists and financial analysts, provides valuable insights into the anticipated trajectory of the Turkish economy. Conducted with 64 participants representing the real and financial sectors, as well as professionals, the September survey offers a snapshot of current market sentiment.

According to the survey results, the expected increase in the Consumer Price Index (CPI) for September remains unchanged from the previous month at 2.22%. However, the year-end CPI inflation expectation has slightly decreased from 43.31% to 43.14%. This marginal decrease suggests a cautious optimism among market participants regarding the effectiveness of current monetary policies in curbing inflation. While still considerably high, the downward revision offers a glimmer of hope for potential economic stabilization.

Looking ahead, expectations for inflation continue to moderate. The survey indicates a decrease in the 12-month inflation forecast from 28.71% to 27.49%, and a more significant drop in the 24-month forecast from 19.30% to 18.38%. These figures suggest that while short-term inflationary pressures remain a concern, there is an expectation for a more substantial easing of inflation over the medium to long term. This gradual decline in inflation expectations is crucial for anchoring price stability and fostering a more predictable economic environment.

Dollar/TL Expectations See Minor Decline, Euro Forecasts Watched Closely

In terms of currency exchange rates, the survey reveals a slight decrease in the year-end USD/TL expectation, moving from 37.2760 to 37.1599. However, the 12-month USD/TL expectation has seen an increase, rising from 42.0348 to 42.4274. This divergence between short-term and medium-term exchange rate forecasts could reflect uncertainty surrounding future economic policies and global market conditions. While the survey focuses on the US dollar, market participants are also keenly observing potential Merkez Bankası 2024 Euro Tahmini (central bank 2024 euro forecast) as the Euro remains a significant currency in Turkish trade and financial markets. Fluctuations in the EUR/TRY exchange rate are equally important for businesses and consumers alike, and any signals from the central bank regarding future Euro movements are closely analyzed.

The survey also provides insights into expectations for the current account deficit. The year-end current account deficit forecast has been revised downwards from $25.5 billion to $22.2 billion. Similarly, the forecast for the next year’s current account deficit has also decreased to $24.3 billion. This improvement in current account deficit expectations could be attributed to various factors, including anticipated improvements in export performance and potential moderation in import demand.

Growth Expectations Revised Downwards for Turkish Economy

Economic growth expectations for the Turkish economy have been slightly revised downwards. The Gross Domestic Product (GDP) growth expectation for the current year has decreased from 3.4% to 3.2%, and the forecast for the next year has also been adjusted downwards from 3.5% to 3.4%. These downward revisions in growth expectations may reflect concerns about global economic slowdown and its potential impact on Turkish economic activity. Despite the slight decrease, the projected growth rates still indicate a positive, albeit moderate, economic expansion.

Policy Rate Expectations Indicate Potential Easing in Monetary Policy

Regarding the Turkish Central Bank’s policy rate, the survey indicates an expectation of 50% for the current month-end. However, the expectation for the policy rate three months later has decreased to 46.48%. Furthermore, the 12-month policy rate expectation has also seen a decline, falling from 33.30% to 31.66%. These figures suggest that market participants anticipate a potential easing of monetary policy in the medium term as inflation gradually moderates and the economy seeks to maintain a growth trajectory. The central bank’s future decisions regarding interest rates will be crucial in shaping both inflation dynamics and the overall economic outlook for Turkey in 2024 and beyond, influencing not only the Turkish Lira but also its relationship with major currencies like the Euro and US Dollar, making merkez bankası 2024 euro tahmini a key point of interest for market watchers.