P.A. Turkey

Citi cuts Turkey growth forecast to 3.4%, sees no case for rate cuts

Citi cut its 2021 economic growth estimate for Turkey on Tuesday to 3.4% from 4%, forecasting a drop in activity from the second quarter as external financial conditions tighten.

The bank raised its forecast for year-end inflation to around 15% from 11.7% following the latest slump in the lira. It also struggled to see an economic case for interest rate cuts this year, unless there was a “significant improvement” in inflation and investment inflows.

Turkey’s central bank is expected to keep its policy rate at 19% on Thursday at its first meeting since President Tayyip Erdogan fired hawkish former governor Naci Agbal.

Reuters