Türkiye’s inflation to drop dramatically by end of 2024
(MENAFN) Sergei Strigo, co-head of emerging markets fixed income at Amundi, Europe's largest asset manager, has indicated that inflation in Türkiye is anticipated to drop sharply by the end of the year. In an exclusive interview with Anadolu, Strigo noted that Amundi is currently engaged with Turkish local assets on a medium-term basis and may consider increasing its exposure if more positive macroeconomic data emerges.
Strigo expressed a favorable outlook on Turkish assets, particularly highlighting the Turkish lira and shorter-dated Turkish local bonds as attractive investments. He also noted significant improvement in the longer-term yield curve. The positive financial returns support Amundi's decision to adopt a medium-term perspective, spanning six to twelve months. He elaborated that purchasing a one-year bond does not necessarily imply a complete exit from Türkiye after that period, as there is potential to reinvest in another bond for an additional year.
Strigo emphasized that further increasing exposure to Türkiye would be contingent on continued positive macroeconomic trends. For a more bullish stance on the long end of the local yield curve, signs of substantial inflation reduction would be required. He mentioned that inflation figures from the previous month were already better than anticipated.
As of July, Türkiye's annual consumer inflation had cooled to 61.78 percent, marking a nine-month low and falling below economists' expectations. This decrease represents a reduction from the 71.60 percent recorded in June, and according to Amundi's forecast, inflation is expected to further decrease to around 50 percent in August. The disinflation process is projected to proceed at a somewhat slower pace, with inflation anticipated to fall within the 40-45 percent range by the end of the year.
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