Turkey’s inflation rate is unlikely to drop close to the central bank’s estimate this year, Goldman Sachs said in a report, according to Bloomberg.
The consumer price inflation rate will probably be around 11.7 percent in December, said Goldman Sachs analysts including Kevin Daly, co-head of economics for central and eastern Europe, the Middle East and Africa, Bloomberg reported on Tuesday.
The forecast seems only achievable with a flat exchange rate, Daly said. Goldman continues to expect monetary policy to start tightening before the end of the year, he said.
Turkey’s central bank revised up its estimate for year-end inflation to 8.9 percent last month from a previous 7.4 percent. The bank has slashed interest rates to 8.25 percent from 24 percent in July 2019 to help the government kickstart economic growth following a currency crisis in 2018. But it has left rates unchanged in June and July citing inflationary pressures.
The lira fell 2 percent to 7 per dollar last week, nearing an all-time low of 7.269 per dollar reached in May. It traded little changed at 6.95 per dollar on Tuesday, just prior to the release of inflation data for July.