NEWS Finance        28/01/2021

Turkish Central Bank keeps its inflation forecast for 2021 unchanged at 9.4%

The Turkish Central Bank has maintained its inflation forecast for 2021 yearend at 9.4%. The Bank also forecast an inflation rate of 7% for 2022 yearend, and 5% for 2023 yearend.


In the Bank’s 2021-I Inflation Report of January 28th, 2021, it was noted that economic activity which “posted a significant domestic demand-driven recovery in the third quarter of 2020” due to “the cumulative effects of high credit growth during the pandemic”,  “continues to have an adverse effect on the current account balance and inflation.”  The Bank is aware that “domestic demand conditions, cumulative cost effects- in particular the exchange rate-, increasing international food and other commodity prices and high levels of inflation expectations continue to affect the inflation outlook adversely”. However, the Bank states its “price stability-oriented monetary policy as critical” and reiterates its wish “to decisively implement a full-fledged inflation targeting strategy in 2021” and “make monetary policy decisions in pursuit of the primary objective of price stability”. The Bank believes that “on the back of the effects of the strong monetary tightening, demand and cost factors that affect inflation are expected to weaken gradually”.


The annual inflation rate as of yearend 2020 was 14.60%. Whether the Turkish Central bank will be able to bring down this rate to 9.4% by the end of 2021 depends largely on the Turkish government’s determination to maintain its new fiscal tightening in face of the on-going economic recession worsened by the pandemic and global trade contraction. Turkey’s new economic team’s declaration that its priority is to maintain price stability has boosted market confidence, with the USD/TL rate stabilising between TL 7.30 and TL 7.40.  


Click here for Turkish Central Bank’s “2021-I Inflation Report January 28th, 2021 - Overview”




Turkey’s net minimum wage has been raised 21.56% to TL 2,825.90 (USD 380) as of 01.01.2021       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate increases to 19.25% in August 2021       Turkey’s official unemployment rate shoots back up to 12% in July 2021       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 83,614,362 as of 2020 yearend       Foreigners visiting Turkey in 2020 falls by 71.7% to 12.7 million       Turkey’s private sector foreign debt is USD 173.9 billion as of 2020 yearend       Turkey’s economy grew by 1.8% in 2020       Foreign Direct Investment inflow to Turkey was USD 7.7 billion in 2020