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JP Morgan See Downside Risks to 45% End-2024 Policy Rate Forecast

TURKEY
  • JP Morgan say they find the December MPC statement hawkish as the CBRT signals high rates for longer. The CBRT pledged to maintain a tight monetary stance as long as needed to ensure sustained price stability. They interpret this as the CBRT being in no rush to cut the policy rate as disinflation starts in 3Q24.
  • JPM expect headline inflation to end 2024 at 40%. They note that the size of the minimum wage hike and administered price hikes (particularly electricity and natural gas prices) might force them to re-assess the pace of disinflation in 2H24.
  • If these hikes are close to the CBRT’s end-2024 inflation forecast of 36%, JPM see downside risks to their year-end policy rate forecast of 45%.

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