JPMorgan expects Turkey’s central bank to cut rates by 100 basis points in October and December, bringing its main rate to 35% by year-end. It forecasts year-end headline inflation of 29.5%.
JPMorgan expects Turkey’s central bank to cut interest rates by 100 basis points at its October 22 meeting and again in December, bringing its main rate to 35% by year-end. The bank also expects headline inflation to reach 29.5% by year-end.
JPMorgan expects annual inflation to ease to 30.2% from 31.5% in August, despite forecasting a 2.2% monthly rise in consumer prices in September. It expects seasonally adjusted monthly headline inflation momentum to slow to 1.9% from 2.3% in August and core inflation momentum to ease to 1.6% from 2.0%.
JPMorgan forecasts a 6% monthly rise in energy prices in September, with higher international oil prices pushing up fuel costs, while food inflation is expected at 0.9%. It also expects Turkey to remove the sliding-scale mechanism on gasoline and gradually phase out tax support for diesel. Turkish financial markets have recently been buffeted by the liquidation of more than 130 investment funds at the centre of transactions described by the justice minister as “Ponzi-like.”
