"CBRT Raised 2025 Inflation Forecast: Details Here"

TCMB Updates Year-End Inflation Forecast

The President of the Central Bank of the Republic of Turkey (CBRT), Fatih Karahan, announced the inflation forecast for 2025. According to the statements, the year-end inflation forecast range for 2025 has been raised from %25-29 to %31-33. This change is a significant indicator in terms of guidance and market expectations.

2026 Year Forecasts Remain Unchanged

The CBRT maintained the inflation forecast range for 2026 at %13-19. The inflation intermediate targets are set at %24, %16, and %9 for the years 2025, 2026, and 2027, respectively. The year-end inflation target for 2025 will be announced as %32.

Sustained Tight Monetary Policy

Karahan conveyed that the tight stance in monetary policy will be maintained "as long as necessary," expressing that stability in the markets will be ensured. He stated that demand conditions in the third quarter are at a disinflationary level and that this outlook will continue for the remainder of the year. In this context, he emphasized that the momentum loss in domestic demand persists.

Assessments on Current Account Deficit and Demand Situation

Karahan noted that although there is an increase in the current account deficit, the compatible trajectory with domestic demand continues. However, he mentioned that the pressure of gold and trade uncertainties on the current account deficit persists. While there are indications of a slowdown in inflation for consumer prices excluding food, it is observed that monthly averages remain high.

Continuing Rigidity in Service Inflation

Karahan indicated that rigidity in service inflation continues. He stated that time-dependent price-setting tendencies are effective in high categories, and expressed that the tight stance in monetary policy will continue to contribute to the downward trend.

In conclusion, the increase in the CBRT's inflation forecast for 2025 may create some uncertainties and risks in the markets. However, the Central Bank's commitment to a tight monetary policy may help keep inflation targets under control.