Turkish inflation expectations rise in key central bank survey

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Forecasts for consumer price inflation in Turkey this year rose in February, according to a monthly survey used by the central bank to help set monetary policy.

Turkey is expected to report annual inflation of 11.23 percent for 2021, the average estimate of 88 financial service professionals and industrialists showed on Friday. The prediction had stood at 11.15 percent in January.

Turkey’s central bank has hiked its benchmark interest rate to 17 percent from 8.25 percent since September to help rein in double-digit inflation and to defend the lira. Inflation stood at 15 percent in January compared with the bank’s year-end goal of 9.4 percent. Central bank governor Naci Ağbal has pledged to keep interest rates elevated to ensure that inflation targets are met.

The Turkish lira was seen weakening to 7.7865 per dollar by the end of the year compared with a previous forecast of 7.9790 per dollar, the central bank said. The currency traded at 7.03 per dollar at 10:24 a.m. local time in Istanbul on Friday. The lira’s value may decline to 7.9427 per dollar in 12 months, it said.

Economic growth for 2021 was predicted at 4.1 percent compared with a previous estimate of 3.9 percent. The current account deficit this year was seen at $24.1 billion, almost unchanged from the previous month’s forecast.

Ahval

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