Turkey’s Inflation: Households Still Expect Rising Prices

Fresh data from September 2025 shows that inflation expectations have cooled across markets, businesses, and households — yet ordinary citizens remain deeply skeptical that price pressures will truly vanish.

The Central Bank of Türkiye (TCMB) released its latest update, revealing a consistent drop in 12-month forward inflation forecasts.

Expectations Are Falling

Compared with August 2025, all major groups surveyed revised their outlooks downward:

• Market participants: From 22.84% in August → 22.25% in September

• Real sector: From 37.70% → 36.80%

• Households: From 54.07% → 52.99%

This decline reflects growing confidence in the government’s disinflation policies and tighter monetary conditions.

Households Still Fear Rising Prices

But while expectations are technically improving, sentiment among ordinary citizens tells another story:

• The share of households expecting faster or equal price increases rose slightly, from 72.45% in August to 72.65% in September.

• Meanwhile, those predicting stable or slower price growth slipped from 27.55% → 27.35%.

This suggests that while official forecasts are easing, public confidence remains fragile, shaped by daily struggles with food, rent, and utility costs.

Why It Matters

Inflation expectations are a self-fulfilling force in economics. When households and firms expect prices to rise, they adjust wages, rents, and contracts accordingly — making it harder for actual inflation to decline.

The data underscores Türkiye’s two-track challenge:

• Markets and institutions are signaling belief in a disinflation path.

• Households, scarred by years of high inflation, remain wary.