Created
: 2024.08.28
2024.08.28 19:38
Turkish policymakers are waiting for some much-needed decline in inflation to back their claim that inflation is moderating through H2 2024. So far, however, only superficial improvement is observed. The month-on-month rate of CPI change even re-accelerated in July, and end-2024 inflation expectations deteriorated, Commerzbank's FX Analyst Tatha Ghose notes.
"We have received further bad news in the form of elevated inflation expectations within consumer and business tendency surveys. The latest survey showed that the manufacturing sector's 12-month forward inflation expectation stands at c.54% in August; the household sector's 12-month forward inflation expectation stands at c.73%. These data portray inflation expectations to be stuck in a range incompatible with 'winning the fight against inflation'."
"All surveys are gradually easing compared with their 2022-23 peaks, but the absolute levels are very different. CBT's survey of market participants has proved to be the most over-optimistic at all timeframes - it hardly went above 45% at its peak when actual CPI inflation was registering 70%. There is simply too much 'mean reversion' built into market forecasts, perhaps. Conversely, the household sector's expectations seem stuck at a higher static range."
"Whatever the explanation of such systematic errors may be, economic agents are still likely to behave in line with their own expectations - in this sense, the economic adjustment necessary to 'anchor' inflation expectations do not seem to have occurred at all. At a time when the lira is depreciating at a faster pace once again and speculation about policymakers' fatigue is mounting, such data come as bad news indeed."
Created
: 2024.08.28
Last updated
: 2024.08.28
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy