JPMorgan ups Turkey inflation, growth forecasts after rates decision

Date:

London (Reuters) – Wall Street bank JPMorgan revised both its growth and inflation outlooks for Turkey upwards after the central bank delivered a smaller-than-expected interest rate hike on Thursday.

JPMorgan forecast that full-year economic growth would stand at 4% by year-end rather than the previously expected 3.2%. Meanwhile, inflationary pressures have intensified in July due to ongoing lira depreciation and tax hikes and wage hikes, JPMorgan analyst Fatih Akcelik said in a note to clients, adding he now expected year-end inflation to stand at 57% rather than 50%.

Inflation was expected to peak at 64% in May 2024 due to unfavourable base effects in natural gas prices and pre-election stimulus, Akcelik added.

“We maintain our year-end policy rate forecast at 30%, and we still expect a 250 bps (basis point) hike at each meeting by the end of the year.”

Turkey’s central bank hiked its policy rate by 250 bps to 17.5% on Thursday, continuing to reverse President Tayyip Erdogan’s low-rates policy as it promised more tightening and said it would support it with additional measures.

Share post:

Related

Latest

For Kuwait’s new emir, Saudi ties are seen as key

Kuwait (Reuters) - Sheikh Meshal al-Ahmad al-Sabah was named...

Pope Francis deplores Israeli killings of civilians at Gaza church

Vatican City (Reuters) - Pope Francis on Sunday again...

Palestinians must find new path from Israeli rule after war, top official says

Ramallah (Reuters) - Immediately after Israel's war in Gaza...

Israel says it struck Hezbollah sites after attacks from Lebanon

Jerusalem/Beirut (Reuters) - Israel said on Sunday it had...