Türkiye’s central bank doubles inflation forecast

annual inflation forecast to 58 percent
Türkiye’s central bank doubles inflation forecast
Turkish inflation

Türkiye’s central bank announced on Thursday that it revised its annual inflation forecast to 58 percent, more than double previous expectations, promising “stability” from 2025.

Turkish Central Bank Governor Hafize Gaye Erkan said in her first press appearance, “We have raised our inflation forecast to 58 percent by the end of 2023,” and vowed to “use all the tools at its disposal to bring inflation back to a single-digit.”

“Inflation will rise temporarily in the short term. We are carefully preparing the atmosphere to start tackling inflation in 2024. After 2025, we expect to enter a period of stability.”

Read: The first conference of Türkiye Central Bank starts Thursday

Erkan, the first woman appointed to the post in June, presented her first comprehensive report on Türkiye’s financial situation during her first press conference.

Previous official forecasts, published ahead of the presidential election in May, bet on inflation of 22.3 percent at the end of 2023.

In June, inflation reached 38.2 percent in a single year according to official statistics, the lowest level in 18 months.

“Due to the exchange rate (of the Turkish lira) and the financial measures taken, the inflation rate will register a temporary increase in the short term. “But we are laying the foundations to start reducing sustainable inflation in 2024.”

Erkan also announced that “on July 14 our reserves increased from about $15 billion to more than $113 billion.”

It is a significant improvement recorded after a tour by President Recep Tayyip Erdogan in several Gulf countries, including Saudi Arabia, Qatar and the United Arab Emirates, during which agreements worth about $100 billion were signed, according to the Turkish press, of which 50 billion were from the UAE alone.

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