inflation, rising prices

Central Bank of Turkey increases its inflation forecast again

The Central Bank of Turkey forecasts that inflation at the end of the year will exceed 65%, with a rise in food prices of 75%.

The Central Bank of Turkey (TCMB) announced on Thursday a new upward revision of the inflation forecast in the country for the end of the year, as well as an increase in expectations about the rise in prices for 2023 due to the continuous increase in the cost of energy and food.

As announced today by the Governor of the Turkish Central Bank, Şahap Kavcıoğlu, during a meeting to release the report on expected inflation for the last quarter of this year, prices are expected to finally reach a rise of 65.2% this year, compared to the previous estimate that placed the increase at 60.4%. Last September, inflation in Turkey reached 83.45%.

The TCMB expects inflation to slow to 22.3% by the end of 2023, and to 8.8% by the end of 2024; even so, the previous Central Bank estimate for 2023 was that prices would increase by a maximum of 19.2%.

“We anticipate that, together with the stabilizing effects of our precautionary measures on monetary factors, the balance between supply and demand and on the current account balance, and the stable direction of the foreign exchange market, it will have a positive impact on the outlook for inflation and price behavior,” Kavcıoğlu assured.

Turkey’s central bank governor has not ruled out further interest rate cuts, despite economists saying they are bad for inflation. This year alone, food prices are expected to skyrocket by 75%, according to Kavcıoğlu himself, while by 2023 the forecast is that the cost of food will increase by at least 22%.