Türkiye's Central Bank hikes year-end inflation projections

By Aysu Bicer

ANKARA (AA) – Türkiye’s Central Bank revised up its year-end inflation forecasts on Thursday, as growing geopolitical risks and global financial volatility drive consumer prices up to historic highs.

Annual inflation is projected to hit 60.4% by the end of this year and 19.2% by the end of 2023, Sahap Kavcioglu, the bank’s governor, told a meeting held to release the year’s third quarterly inflation report.

The previous estimates were 42.8% for 2022 and 12.9% for 2023.

For 2024, the bank expects the inflation rate to be at 8.8% by the end of the year.

The annual inflation rate in Türkiye in June was 78.62%, according to the latest data.

The bank’s report said raising the economy’s “current account surplus capacity … is of critical importance for permanent price stability.”

“When global commodity prices start to normalize, our economy will have reached the capacity to run a current account surplus, which marks the beginning of a new era for the Turkish economy, and export-led growth in which the need for short-term financing is minimized,” Kavcioglu said during his presentation.

Last week, the Central Bank kept its interest rate unchanged at 14%, vowing to “continue to use all available instruments decisively” in its strategy of “liraization” until “strong indicators point to a permanent fall in inflation and the medium-term 5% target is achieved in pursuit of the primary objective of price stability.”