Turkish inflation is out of control

Cover chart:  12 and 24 month ahead inflation forecasts as published by Central Bank of Turkey’s monthly participants survey


Ratings agency Moody’s said Turkey could see consumer price inflation surpass 25% in coming months with another potential interest rate cut in December adding to upside risks for its forecasts. The November survey of participants future expectations, too, revealed a very alarming de-anchoring.


WATCH:  2022 Predictions For Turkish Politics




“We expect consumer price inflation, which stood at 21.3% in November, will accelerate to around 25% or even higher in the coming months,” Moody’s said in the note to clients, dated Wednesday, adding that it forecast CPI at 17-18% at the end of the next year.



Moody’s also said the currency weakness had boosted dollarisation, though so far “confidence in the banking system remains strong with no signs of deposit withdrawals.”


Persistently high inflation would also crimp economic expansion, which Moody’s now forecasting real GDP growth to slow to 4% in 2022 from an estimated 11% for this year.

CPI expectations continued to deteriorate for all terms. Year-end CPI expectation reached to 23.85%, up by 454bps MoM and expectations for 12-month ahead increased by 578bps to 21.39%, according to CB.

Additionally, expectations for 24-month ahead continued to stay at double-digit levels for the 7th consecutive month by 14.41%, up by 265bps. Also, expectations for 5-year ahead continued to deteriorate for the 11th month in a row with 8.72%, up by 76bps.


  • Expectations of USDTRY currency for the year-end increased by 38% to 13.77 and 12-month ahead increased by 42.4% to 15.56.


  • Economic growth expectation of 2021 increased from 9.2% to 9.9% and the next year’s expected growth rate decreased from 4.2% to 4.1%.


  • Expectations of 12-month current account deficit of 2021 decreased from USD19.2bn to USD15.6bn and next year’s expectations decreased from USD19bn to USD11.2bn.


Follow our  English language YouTube videos  @ REAL TURKEY:   https://www.youtube.com/channel/UCKpFJB4GFiNkhmpVZQ_d9Rg


And content at Twitter: @AtillaEng


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 www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.