CBRT Chairman Şahap Kavcıoğlu announced the second inflation report.
In the second inflation report of the year, the Central Bank of the Republic of Turkey raised its inflation forecast for the end of 2022 from 23.2% to 42.8%, and its forecast for 2023 to 12.9%.
Economists on Bloomberg HT rated the inflation report:
“Inflation does not seem possible to come down to around 40%”
Bürümcekçi Research and Consultancy founder Haluk Bürümcekçi rated the CBRT inflation report.
Bürümcekçi said the report was unrealistic and far from market expectations of the Central Bank.
Highlights of Bürümcekçi’s assessment include:
The report is unrealistic. We can say that it is realistic in the short term. In other words, it may seem realistic for inflation to hit 75% in May, but there is no realism after that in this environment. Inflation seems unlikely to fall to around 40% by the end of the year. The market is currently expecting around 55-60%, so despite the revision there is a central bank away from the market. It seems that the probability of a rate hike goes to zero. It is understood that the tightening of the key rate will not be used. Recently, this has also been understood with applications. We will see that many decisions in favor of TL and against the exchange, such as the reserve requirement decision taken on commercial loans, continue to be made. The Central Bank will continue to implement monetary policy indirectly.
“Below 60% inflation is difficult”
Faculty member of Bilkent University Prof. Dr. Hakan Kara said he found the year-end inflation forecast optimistic even though a 19.6% revision was made. Kara pointed out that there will be an acceleration due to energy and wages.
Expressing that he expects a review from the Center and that the review is realistic, Kara said that this review is also optimistic.
60 percent of below Saying he expected no inflation, Kara said: “The high point of the calculation is taken in May and a projection of inflation of 1% seems to have been made on top. However, 1% is very optimistic. Even if inflation is 2% from May, it will be 54% by the end of the year.
“Fees will be adjusted”
Noting that he sees the peak of inflation in October, Kara said: “I predict inflation will rise to 80% in October and decline to 60 by the end of the year. There is a serious deterioration in the price behavior Inflation “There is a serious deterioration. It is done as if there is no increase in energy. I foresee a salary adjustment. companies have already started to adjust it. This will create an acceleration of inflation. he said.
Expressing that he expects more growth than the growth of international organizations, Prof. Kara said people have a strong desire to travel after the pandemic, tourism demand will increase and stronger than expected movement of tourist remittances is expected. Expressing that the industry is maintaining its strength even though there is a slight slowdown in domestic demand, Kara said, “I wouldn’t be surprised if there was more than 4% growth.” used expressions.
“Financing below the key rate is a step against the fight against inflation”
Bilgi University CEFIS Research Director Özlem Derici Şengül said that she expects the peak of inflation to be around September-October and said:
There was an important message in the name of policy implementation. This allowed banks to benefit from a new repo facility, which we can call a new funding tool. As a second important note, he expected the peak to be seen around May. I expected it to fall short of market expectations, but it was a matter of curiosity how it would change the way. It shows that it can go up to 70-75% and it is done with a realistic approach. But year-end expectations will continue to be different. I don’t expect May, but for the increase to continue after May, I expect to see the peak like September and October. The Central Bank is very confident in the strategy it calls reading in order to fight against inflation. In this way, it reduces the rate of inflation. This is why he takes every step towards reading. As a new step, we see that the structure of the guarantee is based on more liras. It is said that it will be financed below the key rate, which means that the cost of financing will be further reduced. In fact, it is a step backwards in terms of fighting inflation.