Citigroup Report on Turkey's Inflation Outlook and Interest Rate Expectation
Emphasizing that inflation problems are structural in nature, Citigroup economists predicted that the Central Bank will cut interest rates by 100 basis points in October.
In a published report, Citigroup economists stated that although growth expectations have weakened, the inflation outlook remains challenging, and they estimated that the Central Bank will lower the policy rate by 100 basis points in October.
Inflation Outlook and Structural Issues
In the report prepared by Citigroup economists İlker Domaç and Gültekin Işıklar, it was stated that growth expectations have weakened, but the inflation outlook continues to remain challenging.
Supply-Side Shocks and Demand Impact
The economists stated that the disinflationary effect of slowing demand remains limited, noting that the shock experienced is predominantly supply-side rather than cyclical, and that Turkey's inflation problem is structural in nature.
Policy Rate and Year-End Expectations
While Citi predicts that the Central Bank will cut the policy rate by 100 basis points in October, the institution continues to maintain its year-end policy rate forecast at 35 percent.
September Inflation Data
According to data released yesterday, annual consumer inflation came in at 29.73 percent in September, falling below 30 percent for the first time since 2021.
In addition, monthly inflation in the same period stood at 1.84 percent, remaining below market forecasts.