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JP Morgan Expect Annual Inflation to End the Year at 50%

TURKEY
  • Annual headline inflation likely bottomed out at 38.2% in June, JPM say, and looks set to rise in 2H23 due to FX pass-through and wage hikes.
  • JPM expect annual inflation to end the year at 50% but see upside risks on their forecast due to anticipated tax hikes and administered price hikes in 2H23.
  • The widening government budget deficit due to civil servant wage hikes, earthquake reconstruction efforts, and fiscal cost of the FX-protected lira deposit accounts is likely to necessitate tax hikes and administered price hikes in 2H23, JPM say.

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