Deutsche Bank has adjusted its economic projections for Turkey, revising several key indicators, including inflation and exchange rate expectations.
Inflation Forecast Increased
Highlighting concerns over persistent inflationary pressures, Deutsche Bank analysts raised their year-end inflation forecast from 26% to 28%. A report by Yiğit Onay and Christiyan Wietoska noted that achieving a substantial reduction in inflation might prove challenging.
USD/TL Projections Updated
The bank’s analysts now anticipate the Turkish lira to trade at 43 against the U.S. dollar by the end of 2025. The end-2026 USD/TL forecast for the longer term is set at 49.
Monetary Policy Outlook
Deutsche Bank expects a 250-basis-point interest rate cut in January, predicting the policy rate will decline to 40% by April. Additionally, the year-end policy rate forecast has been adjusted upward from 30% to 32.5%, reflecting a recalibration of monetary policy expectations.
These revised forecasts underscore the bank’s cautious outlook on Turkey’s economic trajectory amidst inflationary rigidity and exchange rate fluctuations.
Source: bloomberght.com
Translation: Cem Cetinguc