JPMorgan ups Turkey inflation, interest rate forecasts
2023.09.04 10:34
© Reuters. People shop at a fresh market in Istanbul, Turkey July 5, 2023. REUTERS/Dilara Senkaya/File photo
LONDON (Reuters) – Higher-than-expected inflation data for August published on Monday prompted JPMorgan to revise its year-end inflation forecast to 65% from 62% with the annual rate now expected to peak at 73% in May 2024, according to the Wall Street bank.
The bank also said it saw upside risks to its year-end policy rate forecast, which it kept at 35%, but predicted that the central bank’s key interest rate would end next year at 45% rather than previous estimates of 40%.
“August CPI suggests protracted disinflation process,” JPMorgan’s Fatih Akcelik said in a note to clients.
“Since we expect persistent inflation, we forecast more monetary tightening to address inflationary pressures after March 2024 municipal elections.”
Turkey’s annual inflation rate surged to a higher-than-expected 58.94% in August, official data showed earlier on Monday, rising for a second month after a steep fall in the lira currency and recent tax increases.
