| Bussiness and financial district of Levent, which comprises of leading Turkish companies’ headquarters and popular shopping malls, is seen from the Sapphire Tower in Istanbul |
Standard Chartered said on Friday it now expects Turkey’s central bank to cut interest rates by another 300 basis points by year-end to 15 per cent and upped its 2021 inflation and growth forecasts.
“We expect the central bank to look past high headline inflation prints driven by transitory factors such as food and energy prices, and remain focused on supporting economic growth in the period ahead,” said Standard Chartered in a note. The bank had previously forecast 200 bps of rate cuts by year-end.
Standard Chartered also raised its forecast for inflation to 17.5 per cent by year-end from 15.2 per cent and also upped its growth predictions to 8.0 per cent from 5.0 per cent over the same period.
“Exports rose 37 per cent y/y in the first eight months of 2021 and should stay strong as major trading partners – particularly the euro area – experience a robust economic recovery.”