Turkey's central bank increases inflation predictions, vows vigilance

(MENAFN) In response to mounting inflationary pressures, the Turkish Central Bank revised its inflation forecast upwards, projecting a year-end inflation rate of 38 percent. Governor Fatih Kara Khan reaffirmed the bank's commitment to staunchly address the inflationary challenges, pledging to utilize all available measures to prevent any further deterioration in the economic situation. This commitment underscores the central bank's unwavering stance on tightening monetary policy as a means to combat inflation.

Presenting the quarterly report on inflation, Kara Khan highlighted the alarming rise in inflation, which surged to 69.8 percent in April. He indicated that inflation is anticipated to peak this month, reaching levels between 75 and 76 percent, before embarking on a downward trajectory in tandem with a slowdown in domestic demand. This projection reflects the central bank's assessment of the inflationary dynamics and its expectations regarding the future trajectory of price levels.

In addition to revising its inflation forecast for the end of 2024 to 38 percent from the previous estimate of 36 percent, the central bank kept its forecast for the end of 2025 unchanged at 14 percent. Furthermore, inflation is anticipated to gradually decline to nine percent by the end of 2026. These forecasts provide insights into the central bank's outlook on inflationary trends over the medium term, guiding its policy decisions aimed at restoring price stability and fostering sustainable economic growth in Turkey. 

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