MNI BRIEF: Tariffs Force CBRT To Hike 2025 Inflation Forecast
MNI (LONDON) - The Central Bank of the Republic of Turkey revised its 2025 year-end inflation forecast up 3% to 24% on Friday, with 2026’s figure unchanged at 12%. Inflation is seen at 8% in 2027, with Governor Karahan ready to do "whatever it takes" to stabilise at 5% in the medium-term.
Turkey's economy lost momentum in Q3 2024, with domestic demand at disinflationary levels, according to February's Inflation Report. But the strengthening global protectionism has increased upside risks to global inflation, with volatile oil prices, rising gas prices and a possible weakening of global economic activity among mounting uncertainties.
"Due to the various factors that are relatively outside the monetary policy domain and the current data flow, the end-2025 inflation forecast is updated upwards, it said. The CBRT cut the key one-week repo rate by 250bps in both December and January to leave it at 45%, with inflation currently standing at 42.12%. (see MNI CBRT WATCH: Turkey CenBank Cuts 1W Repo 250Bps As Expected )