Inflation, food prices

Central Bank of Turkey forecasts that inflation will reach 43%

The forecast of the Central Bank of Turkey is that inflation will reach 70% in June, gradually reducing in the following months.

Central Bank of Turkey announced today that it expects inflation in the country to approach almost 43% by the end of 2022, due to the increase in food and energy costs caused by the war in Ukraine.

In March, year-on-year inflation in Turkey stood at 61.14%, a new record for the last 20 years, despite tax cuts and government subsidies for electricity bills to ease the burden on households with fewer resources; and the analysts’ forecast is that prices will continue to shoot up at least until June.

In fact, the Central Bank itself acknowledges in its new report presented today that the CPI will be around 70% by then, before falling progressively in the following months. As for the month of April that is about to end, the experts consulted point to an increase in inflation that will be around 68%, due to the conflict in Ukraine and the increase in the price of imported products.

The governor of the Turkish Central Bank, Şahap Kavcıoğlu, pointed out today when presenting the report that inflation will begin to decline in the coming months “thanks to the gradual reduction of mismatches between supply and demand and in the supply chain, as well as due to the measures taken in favor of price stability (in Turkey)”, and forecasted that the CPI in Turkey will be below 10% by the end of 2024.

By the end of 2022, the governor of the Central Bank of Turkey now expects inflation to be around 42.8%, a figure that almost doubles the previous estimate of 23.2% made by the entity just three months ago (before the invasion of Ukraine), and that in fact it was already double than the previous estimate for 2022 made at the end of last year, when it was calculated at just 11.8%.