Turkish market raises year-end inflation expectation to over 28%
File photo shows a close-up of a person shopping in a grocery store aisle. (Adobe Stock Photo)
The Turkish market raised its year-end inflation forecast to 28.30%, up from the previous estimate of 27.05%, according to the Central Bank of the Republic of Türkiye’s (CBRT) Survey of Market Participants in February.
The survey, conducted with 69 participants, including representatives from the real and financial sectors as well as professionals, revealed increased inflation expectations for February.
The anticipated rise in the consumer price index (CPI) for February climbed to 3.23%, up from the previous month’s forecast of 2.65%.
The CPI forecast for 12 months ahead dropped slightly to 25.26% from 25.38%, while the 24-month projection decreased to 17.26% from 17.72%.
Interest rate forecast
Survey participants maintained their policy interest rate forecast at 45% for the end of February, as no Monetary Policy Committee meeting is scheduled for this month, while expectations for the next three months declined to 40%.
The 12-month policy rate projection also decreased from 29.14% to 28.92%.
The next Monetary Policy Committee meeting of the Turkish central bank, which will decide on the new policy interest rate, is scheduled for March 6, 2025.
Meanwhile, the year-end forecast for the U.S. dollar/Turkish lira (USD/TRY) exchange rate decreased slightly to 42.8869 from 43.0265, while the 12-month projection rose to 43.9612 from 43.8140.
The anticipated current account deficit for the end of 2024 increased to $18.8 billion from the previous estimate of $17.4 billion. For the following year, the deficit is expected to reach $24.6 billion.
The gross domestic product (GDP) growth forecast for 2024 was revised down to 3% from 3.2%, while the 2025 projection remained unchanged at 3.9%.
