NEWS Finance        28/10/2020

Turkish Central Bank raises its inflation forecast for 2020 up to 12.1%

The Turkish Central Bank today revised its year-end inflation forecast to 12.1% for 2020, up from 8.9%. The Bank also forecast an inflation rate of 9.4% for 2021.

 

In the Bank’s 2020-IV Inflation Report of October 28th, 2020, it was stated that “Economic activity, after having contracted sharply in the second quarter of the year due to the effects of the pandemic on domestic and external demand, recorded a marked V-type recovery in the third quarter due to the support of the normalization process and strong credit impulse”. However, it was then noted that the “rapid economic recovery achieved on the back of strong credit impulse has significant repercussions on the external balance and inflation outlook”. In face of inflationary pressures and the weakness of the Turkish lira, the report said that in October, despite keeping the policy interest rate unchanged, the Bank had decided “to keep the tight stance of the monetary and liquidity policies until the inflation outlook displays a significant improvement”.

 

The report stated that the “ongoing tightening in monetary and liquidity policies will have a positive impact on the external balance and the inflation outlook in the upcoming period”.

 

The annual inflation rate as of September 2020 was 11.75%. With the Turkish lira depreciating to TL 8.30 to the US dollar this week, the added inflationary pressure that this will bring about will mean that the Bank will find it all but impossible to meet its new inflation target for 2020, or for 2021 for all that matter.

 

Click here for Turkish Central Bank’s “Briefing on 2020-IV Inflation Report October 28th, 2020”

 

 



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 19.89% in October 2021       Turkey’s official unemployment rate falls to 11.5% in September 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