Central Bank hikes inflation forecasts for 2021-22

ANKARA-Anadolu Agency

Turkey's Central Bank on July 29 increased the country's year-end inflation forecast to 14.1 percent for this year, up from 12.2 percent in its previous report.

The bank also hiked the inflation forecast for 2022 to 7.8 percent, up from 7.5 percent, while keeping the target of 5 percent for 2023, Şahap Kavcıoğlu, the bank's governor, told a meeting for the release of the bank's third annual inflation report this year.

Kavcıoğlu underlined that Turkey's Central Bank continues to use all tools with determination and that its policy stance will continue to be formed around inflation.

The Central Bank expects inflation to drop significantly in the third and fourth quarters of 2021, he noted.

High-frequency data indicates that growth in the second quarter will be very high due to base effects, Kavcıoğlu said, adding: "We expect a current account surplus through the rest of 2021 backed by strong rises in exports and a revival of tourism".

Meanwhile, Turkey's annual inflation rate was at 17.53 percent for June, climbing 1.94 percent on a monthly basis.