MNI BRIEF: 'Stronger' Disinflation Expected Ahead - CBRT
MNI (LONDON) - Disinflation will pick-up pace in the months ahead, the Central Bank of the Republic of Turkey said in its August Inflation Report on Thursday, with inflation falling from 61.8% y/y in July to the target level of 38% by the end of year and 14% by end 2025.
Turkish GDP grew by 5.7% on an annual basis and 2.4% on a quarterly basis in Q1 2024, as net exports made a positive contribution for the first time since Q3 2022, the Bank said.
However, with the slowdown in credit growth becoming more pronounced over recent months, second-quarter indicators point to a continued weakening in domestic demand, albeit still at inflationary levels, with services expected to be the main driver of economic expansion. The CBRT has said it will maintain high interest rates for as long as necessary to bring inflation back to target, although there is speculation it could cut later this year (See MNI EM INTERVIEW: CBRT To Cut Rates From Q4- Ex-Treasury Official)