Şimşek: Inflation Expectations Aligning, Signaling Policy Progress

Türkiye’s Treasury and Finance Minister Mehmet Şimşek highlighted a key economic shift this week, noting that the gap between household and market inflation expectations has narrowed to its lowest level in six years—a positive indicator in breaking the cycle of inflation inertia.

In his remarks on X, Şimşek commented on the Turkish Central Bank’s Sectoral Inflation Expectations Survey, pointing to declining inflation forecasts across all segments during June.

Household Inflation Expectations Drop by 19 Points in a Year

According to Şimşek, households’ 12-month inflation outlook fell by 7 points compared to May, and by 19 points year-on-year. He added that both market professionals and real sector actors have also revised their forecasts downward, a sign that confidence in Türkiye’s disinflation path is strengthening.

“The narrowing expectation gap between households and markets is a crucial step in breaking inflation inertia,” Şimşek noted, adding that it reflects the effectiveness of the government’s economic program and its determined implementation.

Lower Oil Prices and Softer Inflation to Ease Financial Conditions

Şimşek also drew attention to falling global oil prices amid easing geopolitical tensions, which he said would further contribute to lower inflation and more supportive domestic financial conditions, especially for the real sector.

“As inflation continues to decline, domestic financial conditions will become increasingly supportive for businesses,” he concluded, reinforcing the message that macroeconomic stabilization efforts are on track.