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Türkiye's year-end inflation expectation rose to 29.21% in July from 29.14% a month earlier, while markets continued to price in no change to the central bank's 37% policy rate at its upcoming meeting, according to the Central Bank of the Republic of Türkiye's (CBRT) latest Survey of Market Participants.
The monthly survey also showed that respondents raised their forecast for July consumer inflation to 1.7% from 1.6%, implying annual consumer inflation will ease to about 31.6% in July from 32.2% in June.
Meanwhile, the 12-month inflation expectation edged up to 24% from 23.8%, while the 24-month outlook eased to 17.8% from 18.3%.
Participants continued to expect the CBRT to resume rate cuts as early as September, with the policy rate forecast to average 36.6% after the next meeting, 35.7% after the following meeting and 29.4% over the next 12 months.
The Turkish central bank continues to fund the market through its costlier overnight lending rate of 40% under precautionary measures introduced after the Iran war erupted in early March.
However, renewed clashes between the United States and Iran around the Strait of Hormuz, effectively ending the June ceasefire, have pushed oil prices back above $90 per barrel, diminishing hopes of monetary easing in the near term.
The Monetary Policy Committee (MPC) is scheduled to announce its latest interest rate decision on Thursday, July 23.
The survey left the expected 2026 current account deficit unchanged at $49.2 billion, while raising the 2027 deficit forecast to $43.3 billion from $42.5 billion. In May, Türkiye's 12-month rolling deficit stood at $37.3 billion.
Market participants modestly revised their exchange-rate forecasts higher, expecting the U.S. dollar to trade at ₺51.5537 by the end of 2026, compared with ₺51.4692 in the previous survey. Their 12-month exchange-rate expectation was little changed at ₺55.6920, slightly below last month's estimate of ₺55.7196.
Respondents also slightly lowered their outlook for economic growth, trimming their 2026 gross domestic product (GDP) growth forecast to 3.1% from 3.2%, while leaving the 2027 projection unchanged at 4.1%.
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