Goldman sees Turkey inflation of near 80% before relief comes

Goldman Sachs said on Friday it expects annual inflation in Turkey to reach almost 80% before easing to 60% by the end of 2022, thanks to so-called favorable base effects.  CB’S Monthly Survey put 12-mth ahead CPI at 40%, still awful, but a vast improvement compared to the current headline of 71% per annum.


Inflation in Turkey hit 73.5% in May, stoked by a currency crisis last year and soaring energy costs due to Russia’s invasion of Ukraine.


The lira lost 44% against the dollar in 2021 in addition to another 24% so far this year. It remains under pressure as real yields in Turkey are deeply negative amid a global tightening cycle.

Turkey’s Slow-Motion Currency Crash



Central Bank Monthly Expectations Survey:   12-mth CPI at

Central Bank of Turkey released its monthly Survey of Expectations by Market and Economic Participants on Friday, which reveals 12-mth ahead CPI inflation at 40%.  The survey revealed increasing pessimism about future economic conditions.  Here are some of the highlights


Policy rate would be kept stable in this month and next 3 months, according to the CBRT’s Survey of Market Participants.


  • Policy rate (14%) would be kept stable in this month, and next 3 months. The next MPC meeting would be held on June 23.


  • CPI expectations continued to deteriorate for short and medium terms. Year-end CPI expectation reached to 64.59%, up by 667bps MoM and expectations for 12-month ahead increased by 463bps to 37.91%. Additionally, expectations for 24-month ahead increased by 250bps MoM to 22.04% whereas expectations for 5-year ahead decreased by 13bps to 9.83%.


  • Expectations of USDTRY currency for the year-end increased by 7.5% to 18.89 and 12-month ahead increased by 12.1% to 20.7.


  • Economic growth expectations increased to 3.5% from 3.5% for 2022, but decreased to 3.8% from 4% for 2023.


  • Current account deficit expectations increased to USD 37bn from USD34.4bn for 2022 and increased to USD 23.1bn from USD 22bn for 2023.



Reuters, local brokerage firm reports


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.