MNI BRIEF: Turkish Central Bank Sees Further Disinflation
MNI (LONDON) - Disinflation is expected to pick up pace in the months ahead, the Central Bank of Turkey said in its latest Inflation Report, and is on track to reach 38% by the end of the year, despite a smaller than expected reduction in both demand and inflation expectations.
Consumer inflation was 61.8% in July 2024 -- within the forecast band given in the previous Inflation Report - as the CBRT continued to maintain a one-week repo rate of 50%. Domestic demand did slow down in Q2, but remained at inflationary levels, the Bank said.
The slowdown of credit growth has become more pronounced, but while Turkey’s current account balance improved on an annual basis, the country’s widening trade deficit and the “robust” outlook in the services balance led to a halt in monthly improvements.