Turkey sharply raises inflation forecast for 2022 from 9.8% last year to 65%

Turkey has sharply raised the country’s inflation forecast for 2022 to 65% from 9.8% expected a year ago, according to a government program published in the Official Gazette.

The new three-year medium-term program, which was jointly prepared by the Ministry of Treasury and Finance and the Strategy and Budget Directorate, forecasts that the country’s inflation will fall to 24.9% in 2023, 13.8 percent in 2024 and 9.9 percent in 2025, reports the Xinhua news agency.

The program’s latest inflation forecast for 2022 pointed to a sharp rise from the 9.8% seen in the same report a year ago, although this was only slightly higher than the central bank’s forecast in July. that year-end inflation in Turkey would be 60.4 percent.

The program estimates that the Turkish economy should grow by 5% in 2023, 5.5% in 2024 and 2025.

Turkey’s unemployment rate is expected to be 10.8% in 2022, 10.4% in 2023, 9.9% in 2024 and 9.6% in 2025, he noted, adding that the trade deficit outside the country is expected to reach 105 billion dollars in 2022 and 80 dollars. billion in 2023.

The program predicts that an increase in production and productivity would limit price increases, among which food prices would fall to single digits in three years, while the Turkish lira would become stable.

Turkey’s economy grew 7.6% year-on-year in the second quarter. Its annual inflation reached 79.6% in July, its highest level in 24 years.

Turkey is facing financial difficulties not seen in decades, with the Turkish lira continuing to plunge since the outbreak of the Covid-19 pandemic in early 2020.

The Russian-Ukrainian war that began in late February has worsened Turkey’s situation by pushing energy prices to new heights.

Despite high inflation, the country has not raised interest rates as many monetary authorities have done to counter inflation.

Last month, the central bank shocked the markets again with a 100 basis point cut in the interest rate to 13%.



(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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