Macro and Politics

* The CBT released its Market Participants Survey for October 2025. Following the higher-than-expected September inflation print, participants’ inflation expectations for the coming periods deteriorated markedly. Accordingly, the 2025 year-end CPI expectation rose to 31.77% in October from 29.86% previously. In addition, the 12-month-ahead CPI expectation increased from 22.25% to 23.26%, while the 24-month-ahead expectation moved up from 16.78% to 17.36%. Participants also expect a 2.34% m/m rise in October CPI. We project monthly CPI to increase by 2.71% in October. Please recall that we recently revised our year-end 2025 CPI forecast upward from 29.7% to 31.5%, while maintaining our 2026 year-end forecast at 23%. Moreover, survey participants expect the Monetary Policy Committee (MPC) to cut the policy rate by 150bps at its upcoming meeting on October 23. In line with this, we also anticipate a 150bps reduction at the October MPC meeting, though we do not entirely rule out the possibility of a smaller cut. Our year-end policy rate forecast stands at 37.5%, with risks tilted to the upside. For end-2026, we project the policy rate at 28%.