Turkish central bank alters name of key survey, citing forecast confusion

Turkey’s central bank revised the name of a benchmark survey of economic forecasts saying its title had created confusion among the public and media.

The ‘Survey of Expectations’, published since 2001, is now called the ‘Survey of Market Participants’, the central bank said in a statement on Friday.

The latest June survey of market expectations, published on Friday, predicted inflation slowing to 14.4 percent by the end of the year from 16.6 percent in May. The estimate stood at 13.8 percent last month, before May inflation data was released. The central bank said in its April Inflation Report that it expects year-end inflation of 12.2 percent.

“Accordingly, it is underlined once again that the results of the Market Participants Survey do not reflect the CBRT's own forecasts and expectations, and this survey is compiled from the estimates of financial and real sector professionals,” the central bank said.

Central Bank governor Şahap Kavcıoğlu, appointed by President Recep Tayyip Erdoğan in mid-March, has said he will decide on the level of interest rates according to actual and expected inflation. Late last month, Erdoğan said it was imperative that the bank reduce rates from 19 percent, adding that he expected the cut in July or August. Erdoğan has sacked three governors in less than three years.

In a decision to leave interest rates unchanged last month, the central bank said "the policy stance will continue to be determined by taking into account inflation developments and inflation expectations". It did not provide a definition of "expectations". The bank stated that "the current monetary policy stance will be maintained until the significant fall in the April Inflation Report’s forecast path is achieved."

The methodology and publication date of the survey will remain unchanged, the central bank said.

(This story was updated with central bank comments in the sixth paragraph.)