Türkiye’s Minister of Finance and Treasury, Mehmet Şimşek, announced a marked improvement in inflation expectations across all sectors, citing it as a key indicator of the country’s stabilizing economic outlook.

The announcement follows the release of the Central Bank of the Republic of Türkiye’s (CBRT) June 2025 Sectoral Inflation Expectations Report, which recorded notable declines in inflation forecasts, particularly among households. According to the data, household inflation expectations for the next 12 months dropped 7 percentage points compared to May and 19 points from June 2024, reflecting growing public confidence in the country’s economic management.

“This is a clear indication that inflation inertia is weakening,” said Minister Şimşek in a statement shared on social media. “The gap between household and market inflation expectations has narrowed to its lowest level in nearly six years, signaling that our economic program is delivering results through strong and targeted policies.”

Şimşek emphasized that the success was driven by a combination of domestic policy reforms and easing global pressures. He specifically cited falling oil prices—linked to de-escalation in regional geopolitical tensions—as a contributing factor that could further support the real economy by improving financing conditions.

The minister's statement comes as part of the Turkish government’s broader effort to restore price stability, strengthen investor confidence, and lay the groundwork for sustainable growth. The CBRT’s report also suggests that economic actors, including consumers, are increasingly aligning their expectations with the government’s disinflation trajectory.

Minister Şimşek concluded by reaffirming the government’s commitment to maintaining fiscal discipline and implementing structural reforms. “This trend reinforces our resolve to achieve lasting macroeconomic stability and supports our fight against inflation,” he noted.

The CBRT report is seen as a hopeful sign that the policy mix of tighter monetary conditions and structural adjustments is starting to bear fruit in the eyes of both markets and citizens. (ILKHA)