Inflation in Türkiye expected falling to around 24% next year: IMF

By Ovunc Kutlu

ISTANBUL (AA) - Inflation in Türkiye is expected to fall to around 24% next year, according to a report released by the International Monetary Fund (IMF) on Wednesday.

"In the medium term, a further drop in inflation would boost confidence, and growth would rise back toward potential of 3.5-4 percent," the IMF said in its 2024 Article IV Mission.

The financial agency said headline inflation in Türkiye has started easing this summer, but still it remains high, adding "Despite favorable base effects, still-strong inertia would keep inflation at around 43 percent at end-December."

The IMF said a tighter policy mix that is focused on fiscal policy would reduce risks and bring inflation down more quickly and sustainably.

It added that a larger and more front-loaded fiscal consolidation is needed to help reduce inflation.

The agency said tight financial conditions will be needed until inflation is firmly on a downward path and inflation expectations converge to the central bank's forecast range.

Türkiye's annual inflation rate was at 61.78% in July, slowing from 71.60% in June, and down from 75.45% in May.