The Communication Aspect of This Program Is Weak Too...

There was an important detail in the Central Bank's recent Monetary Policy Meetings announcement: "The gap between the expectations of economic actors and our targets has widened."

In fact, that wasn't exactly the sentence, but it was meant to convey this. In other words, the inflation expectations of a large portion of society do not align with either the Medium Term Program (OVP) or the Central Bank's expectations. Meanwhile, we have also witnessed a threatening statement from a Deputy Governor of the Central Bank, saying "if you do not conform to our expectations, you will suffer." All of this shows that the economic management is on edge and a comprehensive revision of all targets could be on the table come November.

At this very moment, a survey from the Central Bank revealed that household perceptions of inflation differ from those of market participants and the real sector.

Accordingly, the annual inflation expectations for 12 months ahead decreased by 1.3 points to 28.7% for market participants and by 1.2 points to 53.8% for the real sector, while expectations for households increased by 1.1 points to 73.1%. In other words, neither the real sector nor the citizens believe in the program. Additionally, the 73.1% level represents the highest expectation for households in the last three months.

Naturally, one might wonder: What more do we need to prove that this program, believed by a handful of financiers but not by the real sector or the citizens, is incorrect? Most likely, the economic management is trying to find the cause of this distortion as before, through trial-and-error or intuition.

A manager who sees that something is going wrong should first search for the problem within their established strategy, rather than looking outside. This program has been malfunctioning since it was first implemented last year. However, it should have been understood that after six months, it would not yield the desired results. Continuing to insist on it evokes a connotation of stubbornness rather than clarity.

In summary: Strategies that are not embraced, assimilated, or felt as part of the people's lives cannot be successful. Success does not come by forcing people without ensuring that everyone is looking in the same direction. Decisions made without full consensus or informing critical units are doomed to fail. Therefore, it is important for strategies to be prepared based on information flowing from the bottom up, with awareness of available opportunities and capabilities. Any approach that deviates from this will create instability and the expectation of miracles. I believe that miracles are the last thing to be sought in the quest for success.

Prof. Alkin