Koç University Survey: Türkiye’s 12-Month Inflation Expectation Falls to 59%, But Divides Deepen
Household Debt
The August 2025 Household Inflation Expectation Survey by Koç University shows that while the public’s 12-month inflation expectation has dropped to 59%, significant divergences persist across income, education, and political trust lines.
Conducted between August 1–10 with 2,512 participants, the survey recorded a 2-point drop from the previous month’s forecast. Perceived inflation for the past 12 months stood at 69%, indicating that many believe inflation will trend lower in the year ahead.
Widening Gap in Expectations
The growing gap between average and median values suggests that a subset of respondents has extremely high inflation expectations, skewing the overall average upward. Increases in standard deviation and interquartile range further confirm that inflation forecasts are becoming more polarized.
Dollarization Trend Remains Strong
Savings preferences showed little change from previous months. Gold and foreign currency remain the top investment choices, reflecting a strong and persistent dollarization tendency among households. One-third of respondents plan to invest in gold over the next year, while another third favor time-deposit TL accounts.
Trust in Economic Policy Shapes Outlook
The survey also highlights an inverse relationship between trust in government economic policies and inflation expectations. Those lacking trust foresee higher inflation—up to 65%—while respondents who trust policy direction report significantly lower projections.
Income and Education Levels Affect Expectations
Interestingly, higher income levels correlate with higher inflation expectations, while lower-income participants anticipate a milder price increase. Education also plays a role: respondents with less than a high school education report higher expectations, whereas university graduates generally forecast lower rates—although their outlook may still be influenced by factors like media consumption, political polarization, and access to information sources.
