Record expectations for end-of-year inflation among retirees, based on study conducted by prominent university

For the first time, Koç University, in collaboration with Konda, published the results of a household inflation expectation survey. According to the survey, households’ inflation expectations stand at 96 percent, well above the market’s expectation of 43.5 percent and the Central Bank’s expectation of 36 percent. Retirees, in particular, made the most pessimistic prediction, foreseeing inflation reaching 118 percent.

Koç University, in collaboration with Konda Research and Consulting Company, began measuring monthly Household Inflation Expectations from April 2024 onwards. As of April 2024, households’ annual inflation expectation stood at 119 percent, while their expectation for the end of 2024 shaped up to be 96 percent. Market experts, however, predict the annual inflation to reach 70 percent by April and complete the year at 43.5 percent. The Central Bank’s year-end estimate stands at 36 percent. The results of the household inflation expectation survey indicate that people have much higher expectations than the market.

Anticipating a decrease towards the end of the year

Surveyors noted that household end-of-year inflation expectations increased from 72 percent to 96 percent between January 2024 and April 2024, emphasizing that this change goes beyond the increase observed in headline inflation figures in the first quarter of the year. According to the survey, looking at the trend of household inflation expectations for the rest of the year, expectations dropped by up to 25 points from around 119 percent in April to 96 percent by year-end.

Another question asked in the survey was, “Is it a suitable time to buy durable consumer goods such as refrigerators, electronic devices, or would you prefer to buy them six months later?” to which 92 percent of the respondents answered yes.

Prediction lowest at 108.13 percent for the lowest income group

Looking at the year-end inflation prediction based on total household income, the highest expectation was for households with an income of 10,000 TL or less. The prediction for this group stood at 108.13 percent, while it was 104.25 percent for incomes between 10,000 and 15,000 TL, 92.63 percent for incomes between 15,000 and 20,000 TL, and 96.11 percent for incomes of 50,000 TL and above. As income decreases, the year-end inflation expectation rises.