LONDON: JPMorgan said on Monday it expects Turkey’s central bank to hike interest rates to 25% from the current 8.5% at its June meeting, adding this could come with forward guidance suggesting smaller hikes ahead if needed.

June 22 is the first scheduled policy meeting after Hafize Gaye Erkan was appointed as central bank governor on Friday.

“We maintain our year-end policy rate forecast at 30%, with risks on the upside,” Nicolaie Alexandru-Chidesciuc wrote in a note to clients.

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“We forecast a recession in 2H23 on the back of a tightening in credit conditions.”

The Wall Street bank confirmed it expected the country to tip into recession in the second half of the year due to tightening credit conditions.