Monetary policy expected to remain tight, says expert
LONDON - Anadolu Agency
Türkiye is expected to signal that its tight monetary stance will continue when the Central Bank releases its next inflation report on Nov. 7, a senior economist has said.
Zümrüt İmamoğlu, senior Türkiye economist at Nomura, said inflation is expected to be around 31.2 percent by the end of the year, adding that Nomura revised its outlook due to market volatility, global tariff effects, rising gold prices and weather-related shocks to food costs.
İmamoğlu noted frost in spring and drought in summer drove food prices beyond projections, adding that year-end inflation could be below 30 percent if the unexpected impact on food inflation were excluded.
“I can’t really say a mistake was made but many factors like political, global and climate issues came together and led disinflation to continue slower than we expected, but it is indeed happening; it is just that it may be a little hard to feel it,” she explained.
İmamoğlu emphasized disinflation requires long-term and costly policy choices but the burden is temporary.
“The economic admin wants a soft landing, and since June 2023, they have yet to take any steps to quickly push the economy into a recession — parallel to soft landing, we also estimate a slightly delayed inflation path,” she continued.
İmamoğlu said the Central Bank’s fourth inflation report of the year may include upward revisions to inflation forecasts.
She said the bank may keep its inflation targets for 2025 and 2026 at 24 percent and 16 percent, noting that its existing 2025 forecast stands at 25-29 percent.
The bank may increase this rate to a range of 28-32 percent, while the inflation estimate for the end of 2026 may be in the range of 13–19 percent, according to İmamoğlu.
“We expect that the bank will signal that its tight stance will continue, while we may also hear its plans for a macro-prudential framework,” she said.
Nomura expects Türkiye’s year-end inflation at 21-22 percent and its policy rate at 28 percent in 2026.
