Pessimism and Inflation: How Firms' Perception of Economic Outlook Shapes Inflation Expectations"

Okan Akarsu, Altan Aldan and Unal Seven

CBT Research Notes in Economics from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: [EN] This study examines how firms’ perceptions of their business environment and expectations of their own future sales shape their inflation expectations, with particular attention to differences across inflation regimes. Using firm-level data from Türkiye’s Business Tendency Survey (BTS), we find that firms with a weaker assessment of their industry’s current state tend to forecast higher inflation, particularly during periods of heightened uncertainty. In high-inflation environments, firms’ inflation expectations are more strongly associated with their perceptions of current industry conditions, whereas expectations about their own future sales play a comparatively smaller role. Conversely, firms' expectations for their own sales become a more decisive factor in their inflation forecasts during low-inflation or disinflationary periods. These results highlight the state-dependent nature of firms’ inflation expectation formation. By shedding light on the mechanisms through which firms form expectations, this note underscores how reducing macroeconomic uncertainty and strengthening policy communication can enhance the effectiveness of monetary policy. [TR] Bu calisma, firmalarin sektorel duruma iliskin algilarinin ve satis beklentilerinin enflasyon beklentilerini nasil sekillendirdigini, farkli enflasyon rejimleri altinda incelemektedir. Iktisadi Yonelim Anketi (IYA) verilerini kullanan analizimiz, sektorlerinin mevcut durumuna iliskin gorece daha olumsuz beklentiler icinde olan firmalarin, ozellikle belirsizligin arttigi donemlerde, diger firmalara gore daha yuksek enflasyon tahmininde bulunma egiliminde olduklarini gostermektedir. Yuksek enflasyon ortaminda, firmalarin enflasyon beklentileri, sektorlerinin mevcut kosullarina iliskin algilariyla daha guclu bir sekilde iliskilidir; buna karsilik, gelecekteki satislarina iliskin beklentilerinin enflasyon bekleyisleri uzerine etkisi daha sinirli kalmaktadir. Buna karsin, dusuk enflasyon veya dezenflasyon donemlerinde, firmalarin satis beklentileri enflasyon tahminlerinde daha belirleyici bir faktor haline gelmektedir. Bu bulgular, firmalarin enflasyon beklenti olusumunun duruma bagli bir yapiya sahip oldugunu ortaya koymaktadir. Firmalarin beklenti olusturma mekanizmalarina isik tutan bu calisma, makroekonomik belirsizligin azaltilmasi ve politika iletisiminin guclendirilmesinin para politikasinin etkinligini artirmada onemli bir rol oynayabilecegini vurgulamaktadir.

Date: 2025
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