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October 4, 2024
Restrictive monetary policy and tight financial conditions lead output gap to turn into negative in 3Q24. Fiscal consolidation is projected for 2025, which could provide room for a gradual monetary easing. Overall, the policy mix will become more restrictive, potentially curbing GDP growth to below 3% in 2025.
July 12, 2024
The economic activity shows signs of cooling, while the normalization in demand continues to be gradual. The inflation trend continues easing in the presence of historically much tighter monetary stance. Still, high inflation expectations and supportive fiscal stance remain as the challenges on the inflation outlook.
June 12, 2024
The committed actions against inflation are well-received. Foreign currency demand of residents prior to the March local election has reversed and foreigners’ inflow for Turkish assets has accelerated. Yet, lagging fiscal measures & macro-prudential policies on retailer spending keep challenges on inflation outlook.
May 15, 2024
The key point remains to be suppressing consumption since the slow-down in domestic demand is still limited and aggregate demand remains stronger than supply. We eliminate our previous downward bias on 2024 GDP forecast (3.5%) and get ready to have a downward revision on our exchange rate and inflation forecasts for 2024.
April 8, 2024
After the local election results, we expect the maintenance of current economic policies with more aggressive tightening in the short term. Therefore, expected additional restrictive measures might generate downside risk on our short term inflation (45% by 2024 end) and growth (3.5% for 2024) forecasts.
March 6, 2024
After increased concerns on inflation outlook and uncertainty ahead of the local election, there has been additional stress on the Turkish financial markets most recently. We expect more restrictive policies going forward, which will keep the current stabilization program on course.
February 29, 2024
Turkish economy grew by 4.0% y/y in 4Q23 (vs. 3.6% exp. and consensus), leading to an overall GDP growth of 4.5% in 2023. We maintain our 2024 GDP growth forecast of 3.5%, for which we envisage pre-election fiscal impulse and expected capital inflows will be supportive.
February 1, 2024
We expect GDP growth to materialize closer to 4.5% in 2023 and decelerate to nearly 3.5% in 2024, where the fiscal stance and the size of capital inflows will be decisive. Leading indicators show that domestic demand remains stronger than supply, posing risks on both inflation and current account deficit.
November 30, 2023
Turkish economy grew by 5.9% y/y in 3Q, above the market consensus of 5.3% but parallel to our expectation of 6%. We expect GDP growth rate to be 4.5% in 2023 but decelerate to 3.5% in 2024 with a bias to the downside.
September 1, 2023
Turkish economy grew by 3.8% in 2Q23 in annual terms slightly above the market consensus of 3.5% (vs. our expectation of 4.5%), which corresponds to 5% GDP growth if the calendar day adjustment is made. We expect GDP growth to materialize in the range of 4% to 4.5% with a high probability.
August 3, 2023
Consumer prices rose by 9.49% in July, higher than our expectation (9%) and market consensus (8.6%) while annual consumer inflation accelerated significantly to 47.8% from 38.2% the month before. We expect annual consumer inflation to accelerate to near 65% at the end of 2023 and only decline to 35-40% by 2024 year-end.
July 6, 2023
Consumer prices rose by 3.92% in June, lower than both our expectation (4.85%) and market consensus (4.3%), whereas annual inflation dropped to 38.2% from 39.6% in May on favorable base effects led by energy prices. We expect annual consumer inflation to increase now onwards and finish the year at 55%.
