ISTANBUL: Turkey’s annual inflation is expected to dip from its 24-year peak to 84.65% in November and touch 69% by year-end, a Reuters poll showed on Wednesday, after the central bank wrapped up its unorthodox easing cycle despite soaring prices.
Annual inflation has soared for 17 straight months since last year, when the central bank began cutting interest rates.
President Tayyip Erdogan had sought the easing cycle that has lowered the policy rate to 9%, from 19%.
Inflation hit a 24-year high of 85.51% in October, as the central bank continued easing, citing an economic slowdown. In November, after another 150 basis-point cut, the bank signalled it would hold policy steady in coming months.
Annual inflation is seen declining to 84.65% in November, according to the median estimate of 11 economists in the Reuters poll, with forecasts ranging between 82.7% and 85.3%.
On a monthly basis, inflation is expected to stand at 3%, the poll’s median estimate showed, in a range of 1.9% to 3.4%.
This is stoked by food, tobacco and household equipment prices, economists say, on top of rises in clothing and shoes.
Economists expected inflation to cool toward year end, largely due to favourable base effects from 2021, when the rate cuts sparked a currency crisis that sent prices soaring.
Turkish trade deficit surges 422% in October
The lira shed 44% of its value against the dollar in 2021, most of it during the crisis.
It has declined by a further 29% this year, touching historic lows.
Despite the inflationary spiral, and counter to orthodox economic policy, Erdogan says high rates cause inflation and he had called for single-digit rates by year end.
Turkey’s easing came as economies globally aggressively tightened monetary policy.
The government has emphasized low rates to boost production and exports with the aim of achieving a current account surplus, which it says will lead to a lasting fall in inflation.
Inflation is seen falling to 69% next month, the median estimate of 13 economists showed. Forecasts ranged from 67.00% to 74.80%.
Last month the central bank predicted 65.20% inflation at year-end.
The Turkish Statistical Institute is scheduled to announce November inflation data at 0700 GMT on Dec. 5.
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