Household inflation expectation in Türkiye improved slightly in June, while those of market participants and the real sector remained broadly unchanged, a survey published by the country's central bank showed on Monday.
According to the Central Bank of the Republic of Türkiye (CBRT), 12-month ahead annual inflation expectations of households decreased 3.38 percentage points to 46.13%.
Moreover, for June 2026, 12-month ahead annual inflation expectations decreased by 0.01 points compared to the previous month for market participants, falling to 23.81%. For the real sector, the figure remained unchanged at 33.10%.
The 12-month ahead expectations among the household category were recorded at the lowest level this year, marking an improvement from 51.56% in April and 49.51% in May, according to the CBRT survey.
Turkish officials had often in the past emphasized rigidness in inflation expectations, particularly among households, while also indicating that the improvement in inflation expectations contributes to the disinflation process.
The disinflation process has, however, slowed down in the face of rising energy prices following the start of the U.S.-Israel-Iran war in February.
The consumer price index (CPI) increased 32.6% from a year ago in May, up from 32.4% in April, official data showed earlier this month.
CBRT raised its year-end interim inflation target to 24% from 16% last month, while at the time warning that the short-term inflationary effects of the Iran war would remain "pronounced."
The bank, in its last monetary policy committee (MPC) meeting, also decided to keep rates on hold, at 37%, citing that it is closely monitoring "the impact of geopolitical developments on the inflation outlook."
The bank thus joined many of the global peers, including the Federal Reserve (Fed) and the Bank of England (BoE), which similarly opted to keep rates unchanged, while following the effects of the war.
Yet, the recent breakthrough in talks between the U.S. and Iran has resulted in oil prices easing to pre-war levels, boosting the sentiment in global markets and providing a sign of relief for importing countries.
Earlier this month, while pledging that the government's disinflation stance remains "firm," Treasury and Finance Minister Mehmet Şimşek said that inflation this year might be in the "mid-20s, if not high 20s."
The banking giant BBVA, in its research published last week, said it expects the disinflation process "to remain broadly on track" against a softer growth backdrop in the short term.
"Persistent inflationary pressures and external uncertainties warrant a more cautious policy outlook, while selective easing is likely to continue within an overall restrictive policy mix," it added.
In a statement on Monday, evaluating the survey, Şimşek reiterated they "continue to work with determination in line with our disinflation target."
The escalation of geopolitical developments in increasing energy prices has created downward pressure on the short-term inflation outlook, negatively affecting expectations, he said in a post on the social media platform X.
"By utilizing the fiscal space we created through our program, we swiftly and effectively implemented the necessary measures, particularly the sliding scale mechanism, to prevent a permanent deterioration in expectations," he added, referring to a special system limiting the increase in fuel prices to be passed onto consumers.
He also cited that in June, household inflation expectations for 12 months ahead "improved by 3.4 points compared to the previous month."
"We expect the normalization of energy prices, as geopolitical tensions ease, to support the improvement in expectations," he noted.
