Macro Snapshot: CBRT’s Expectations Survey

Policy rate would be kept stable in May but could be decreased by 75bps in next 3 months, according to the CBRT’s Survey of Expectations.

MoM expectations were over the historical averages in the coming months (2003-2019 Median – May: +0.6% Jun.: +0.1% Jul.: +0.3%).

YoY CPI figures could be around 16.8-17% in next 3-month period.

Year-end CPI expectation reached to 13.81%, up 69bps MoM.

According to the probability distributions of inflation expectaions, YoY CPI is expected to be at double-digit levels with a 87.8% of probability in the coming
12-months while that probability hit 50.5% for 24-month ahead.

Both short term inflation expectations (12-month:+55bps to 11.81%, 24-month ahead: +44bps to 9.99%) and the long term expectations continued to deteriorate (5 year:+2bps to 7.4% and 10-year ahead: +22bps to 6.45%).

BIST o/n repo rate is expected to be at 18.95% at the end of the month.

Policy rate (19%) would be kept stable at 19% in this month but there could be a 75bps of cut in next 3 months.

The policy rate could be at 14- 14.25% in 12-month ahead and 11.5-11.75% in 24-month ahead.

3-month bond rate expectations decreased by 10bps on average.

Both 5-year and 10-year bond rates could be around 15.6% in May 2022.

Economic growth expectation of 2021 remained stable at 4.3% while next year’s expected growth decreased by 0.1bps to 4.1%.

Expectations of 12-month current account deficit of 2021 decreased from USD25.8bn to USD25.4bn whereas next year’s expectations increased from USD22.2bn to USD24bn.

Upward trend on the expectations of USDTRY level continued in May.

Expectations of USDTRY currency for the year-end increased by 1.6% to TL8.71 and 12-month ahead increased by 1.9% to TL 8.95.


Source: Y.F. Securities Research