Wall Street banks predict more inflation pain ahead for Turkey
2022.04.04 15:27
FILE PHOTO: A vendor selling seafood serves customers in Ankara, Turkey February 16, 2022. REUTERS/Cagla Gurdogan
LONDON (Reuters) – Wall Street banks predicted on Monday more price pressures ahead for Turkey after the country reported annual inflation rates climbing to a 20-year high of 61.14% in March.
JPMorgan (NYSE:JPM) predicted Turkey’s annual inflation would hover in the 65-70% range until the very end of the year when it could fall to 44% due to strong base effects.
“The CBRT (Turkey central bank) has put all its emphasis on the FX-protected deposit scheme and is unlikely react to the CPI data no matter how strong it is,” said Yarkin Cebeci at JPMorgan in a note to clients.
Goldman Sachs (NYSE:GS) forecast inflation to peak around 67% in May-June and remain above 65% for most of 2022 though end the year at 45%.
“We also see upside risks from commodity prices and the monetary policy stance which is not geared to fighting inflation,” Murat Unur at Goldman Sachs wrote in a note to clients. “Real rates in Turkey are now deeply in negative territory and are likely to fuel inflation further in the coming months.”
